Fintech Notes

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Gabriel Soderberg, John Kiff, Hervé Tourpe, Marianne Bechara, Stephanie Forte, Kathleen Kao, Ashley Lannquist, Tao Sun, and Akihiro Yoshinaga. How Should Central Banks Explore Central Bank Digital Currency?, (USA: International Monetary Fund, 2023) accessed December 10, 2024

Summary

Digitalization of the economy provides both challenges and opportunities. Central banks should ensure that they have the capacity to continue to meet their policy objectives in the digital age. It is in this context that central bank digital currency (CBDC) should be evaluated. If designed appropriately, CBDCs could allow central banks to modernize payment systems and future-proof central bank money as the pace and shape of digitalization continues to evolve. However, the decision to proceed with CBDC exploration and an eventual launch would need to be jurisdiction specific, depending on the degree of digitalization of the economy, the legal and regulatory frameworks, and the central bank’s internal capacity. This paper proposes a dynamic decision-making framework under which the central bank can make decisions under uncertainty. A phased and iterative approach could allow central banks to adjust the pace, scale, and scope of their CBDC projects as the domestic and international environment changes.

Subject: Central Bank digital currencies, Commercial banks, Currencies, Economic sectors, Financial institutions, Financial markets, Money, Payment systems, Technology

Keywords: CBDC project, Central Bank digital currencies, Central bank digital currency, Commercial banks, Currencies, Decision-making framework, Digitalization, Fintech note, Global, IMF Fintech Note 2023/008, IMF Library, Payment systems, Payments, Project management, Publication order, Sub-Saharan Africa

Publication Details

  • Pages:

    43

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Fintech Notes No 2023/008

  • Stock No:

    FTNEA2023008

  • ISBN:

    9798400253768

  • ISSN:

    2664-5912