Central Bank Digital Currency's Role in Promoting Financial Inclusion
Fintech Notes, September 22, 2023
Source details
- Canonical URL
- Central Bank Digital Currency's Role in Promoting Financial Inclusion
Other formats
Bibliographic details
- Authors: Ashley Lannquist, Brandon Joel Tan
- Published: September 22, 2023
- Series: Fintech Notes
- DOI: https://doi.org/10.5089/9798400253331.063
Summary
- Financial inclusion is a key policy objective that central banks, especially those in emerging and low-income countries, are considering for retail central bank digital currency (CBDC).
- If properly designed to address the barriers to financial inclusion, CBDCs have the opportunity to gain acceptance by the financially excluded for digital payments.
- CBDC can serve as an entry point to the broader formal financial system.
- CBDC has special aspects that may benefit financial inclusion, including being a risk-free and widely acceptable form of digital money, availability for offline payments, and potentially lower costs and greater accessibility.
- CBDC is not a panacea to financial inclusion, and additional experience is needed to fully understand its potential impact.
Major findings and points
- CBDC characteristics that may promote inclusion:
- Risk-free and widely acceptable form of digital money.
- Availability for offline payments.
- Potentially lower costs and greater accessibility for users.
- Conditions for CBDC to support inclusion:
- Proper design that addresses barriers to financial inclusion.
- Acceptance by the financially excluded for digital payments.
- Limitations:
- CBDC alone cannot solve all financial inclusion challenges.
- Further practical experience and evidence are required to assess full impact.
Policy implications and considerations
- Central banks should prioritize design features that explicitly target barriers to financial inclusion.
- Attention to offline functionality and cost structures could enhance CBDC accessibility for excluded populations.
- Monitoring and evaluation are necessary as CBDC pilots and deployments progress to build evidence on inclusion outcomes.
Publication and metadata
- ByAshley Lannquist, Brandon Joel Tan
- September 22, 2023
- Series: Fintech Notes No 2023/011
- Issue: 011
- Volume: 2023
- Pages: 37
- DOI: https://doi.org/10.5089/9798400253331.063
- Stock No: FTNEA2023011
- ISBN: 9798400253331
- ISSN: 2664-5912
- Subjects: Central Bank digital currencies, Digital financial services, Economic sectors, Financial inclusion, Financial markets, Financial services, Payment systems, Technology
- Keywords: Central Bank digital currencies, Central bank digital currency, central bank digital currency's role, Digital financial services, digital inclusion, digital payments, financial inclusion, Global, IMF Fintech Note 2023/011, IMF Library, Payment systems, publication order, publications service, Sub-Saharan Africa
Central Bank Digital Currency's Role in Promoting Financial Inclusion — Fintech Notes 2023/011 (September 22, 2023) by Ashley Lannquist and Brandon Joel Tan.
Content in this bundle
- Ftnea2023011