Abstract: With the advent of the digital age, central bank digital currency (CBDC) has increasingly become the focus of both policy practice and theoretical research. Based on the characteristics of e-CNY, a dynamic stochastic general equilibrium (DSGE) model incorporating heterogeneous firms is constructed to study the promotion process of CBDC and its potential economic effects. The results indicate that: firstly, transaction efficiency is the main factor affecting the promotion and economic effects of cash-like CBDC, but the role of privacy cannot be ignored. Secondly, digital currency has not completely replaced cash, and under the steady state of the economic system, the proportion of digital currency in the total currency volume is about 40%. Thirdly, the promotion of digital currency is influenced by factors such as transaction efficiency and tax rates, and there may be significant differences in the promotion effects of digital currency across different economies. Fourthly, digital currency helps enhance the effects of technological progress, monetary policy, and financial market stability, with more pronounced effects in the short term. Therefore, policymakers should carefully weigh the relationship between transaction efficiency and privacy, improve the diversified payment service system, design and promote digital currency with appropriate transaction efficiency and tax cuts, finally fully leverage the potential of digital currency to drive high-quality economic development.

Key words: digital currency, e-CNY, transaction efficiency, privacy