"Arguably, the most significant and plausible financial
stability risk of a general purpose CBDC is that
it can facilitate a flight away from private financial
institutions and markets towards the central bank. Faced
with systemic financial stress, households and other agents
in both advanced and emerging market
economies tend to suddenly shift their deposits towards
financial institutions perceived to be safer and/or
into government securities. Of course, agents could always
flee towards the central bank by holding more
cash. But a CBDC could allow for “digital runs” towards the
central bank with unprecedented speed and
scale. Even in the presence of deposit insurance, the
stability of retail funding could weaken because a
risk-free CBDC provides a very safe alternative."
HN user only posts articles from that site:
Looks most likely a bot posting.
Given that typical leverage ratios are ~3-5% (or banks only have 1 dollar for ever 33 dollars they say they have) and that the total supply of M1 is ~4 Trillion , the balance they have available (5%*2e12=$200 billion) is hitting the first threshold of concern because Bitcoin's market cap is ~$150 billion and cryptocurrencies in total are $360 Billion (though volume would be a better indication of flows). No wonder central banks are literally conspiring to smear Bitcoin rather than admit their own incompetence. Once the Bitcoin/cryptocurrency market caps approach ~$800 billion (equivalent liquidity of M2 leverage) the sparks are really going to fly in liquidity problems with banks.
Will banks avoid this? My guess is no, because such a CBDC won't allow the squish that banks need to cook books or mask liquidity problems as "Crises of confidence" and the competitive forces demand higher and higher amounts of leverage and that the government has colluded with the banking industry to constantly socialize their losses, while the banking sector privatizes gains. For more reading check out, The End of Alchemy 
Which do you think is more likely Bitcoin is going to stop working or banks will under-engineer their financial safety factors and fail (like they've habitually done)? Hopefully you have your skin in the game your gut tells you is going to happen.
Isn't this the whole purpose of crypto? To extend credit when earned therefore not overextended like credit systems?
If the central bank regulates that they must use it for bank to bank non-forex transfers, you may have even less of a choice.
Think of the CBDC as a replacement for the current fiat transfer mechanisms and less of a bitcoin decentralisation project.
On the other side, a CB backed currency does have it's advantages. Stability and security being the biggest (perceived).
Price stability has very little to do with money supply and more to do with the wider economy.
Bitcoin has first mover advantage, but it's sorely lacking in stability.
If an average person were confronted with knowledge that their bank might collapse, they're going to run to FedCoin, not fully decentralized stuff.
Also, bitcoin is very stable.
0 mention of "Bank Runs" in the article.
FDIC, as the underwriter, has the power not to insure a manifestly poorly-run bank. Thus, the FDIC mark is a defacto sign that a bank can be trusted by a consumer.
I would much rather have FDIC (or a system of robust private bank insurance) than need to vet each prospective bank's balance sheet, employees, and loans when choosing to open a personal checking account.
Responding to below:
>>Successfully rescuing a bank from a run is not only a benefit to society as a whole but often makes a small net profit.
This is the free lunch fallacy used to justify involuntary income redistribution. If it were indeed profitable on average, the market would do the bailing out.
Bailing out the irresponsible prevents the evolutionary process of weeding out reckless and incompetent business models and behavioural patterns from working, while unfairly burdening those who are competent in their management of capital, which inhibits the expansion of their influence.