Rise of Digital Money: Implications for Pacific Island Countries


Yong Sarah Zhou ; Tao Sun ; Anca Paduraru ; Arvinder Bharath ; Stephanie Forte ; Kathleen Kao ; Yinqiu Lu ; Maria Fernanda Chacon Rey ; Piyaporn Sodsriwiboon ; Chia Yi Tan ; Bo Zhao

Publication Date:

February 25, 2024

Electronic Access:

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Disclaimer: The views expressed herein are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.


The departmental paper, "Rise of Digital Money: Implications for Pacific Island Countries," delves into the fast-evolving landscape of digital money in a diverse region of extremes in size, remoteness and dispersion, highlighting its significant macroeconomic and financial consequences. It provides an overview of the development of digital money and payment systems in Pacific Island Countries (PICs), assessing potential benefits and risks, with a focus on how they can harness digital technology to enhance financial inclusion and payment efficiency while minimizing risks. To this end, the paper also examines the prerequisites for successfully adopting various forms of digital money and proposes a strategic framework for policy decisions. The paper underscores the potential of digital money in advancing public policy goals, like financial inclusion and improved cross-border connectivity – given the specific characteristics of the region – while cautioning against the risks of rapid and inadequately regulated adoption. Accordingly, it advocates a gradual, well-informed approach, tailored to PICs' unique monetary and financial circumstances, including the presence of national currencies and the maturity of payment systems. Moreover, the paper suggests that a regional approach could help address capacity and scalability challenges in introducing new digital money forms and payment methods in PICs.


Departmental Paper No 2024/003





Publication Date:

February 25, 2024



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