Central Bank Digital Currency Adoption: Inclusive Strategies for Intermediaries and Users

Fintech Notes, September 20, 2024

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Central Bank Digital Currency Adoption: Inclusive Strategies for Intermediaries and Users

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Bibliographic details

• Authors: Tayo Tunyathon Koonprasert, Shiho Kanada, Natsuki Tsuda, Edona Reshidi
• Published: September 20, 2024
• Series: Fintech Notes
• DOI: https://doi.org/10.5089/9798400289422.063

Summary and purpose

• Among countries that have launched central bank digital currency (CBDC) or are conducting large-scale pilots, adoption remains slow and limited.
• The paper argues that successful CBDC adoption hinges not only on technical readiness and operational robustness, but also on strategic policy and design choices that target end-user and intermediary involvement from the outset.
• This paper forms part of the CBDC Virtual Handbook and aims to encourage policymakers to consider adoption early on.

Key challenges to CBDC adoption identified

• Lack of public awareness and trust.
• Preference for existing payment methods.
• Inadequate incentives for intermediaries.

The REDI Framework (overview)

• Introduces a framework that outlines:
  • Regulatory strategies.
  • Education/communication initiatives.
  • Design/deployment choices.
  • Incentive mechanisms to prepare for CBDC adoption.

Target audiences and thematic focus

• Policymakers preparing for CBDC adoption.
• Intermediaries and end users whose involvement is critical to scaling CBDC.
• Subject areas: Central Bank digital currencies, Currencies, Digital financial services, Financial inclusion, Financial markets, Money, Payment systems, Technology.

Practical implications and policy emphasis

• Central banks should not assume automatic uptake post-launch; proactive measures are required.
• Early incorporation of strategies targeting intermediaries and end users is essential to drive adoption and scale.
• Policy and design choices should be coordinated with communication and incentive mechanisms to address awareness, trust, and behavioral preferences.

International Monetary Fund — Fintech Notes 2024/005

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