{
  "title": "Capital Flow Management Measures in the Digital Age (2): Design Choices for Central Bank Digital Currency",
  "publication": "Fintech Notes, September 15, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/fintech-notes/issues/2023/09/15/capital-flow-management-measures-in-the-digital-age-2-design-choices-for-central-bank-538509",
  "canonical": "https://www.imf.org/en/publications/fintech-notes/issues/2023/09/15/capital-flow-management-measures-in-the-digital-age-2-design-choices-for-central-bank-538509",
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  "summary": "This fintech note looks at how capital flow measures (CFMs) could be implemented with central bank digital currency (CBDC), and what benefits, risks and complexities could arise. There are several implications of the analysis.",
  "sections": [
    {
      "heading": "Summary and key findings",
      "content": "- This fintech note analyzes how capital flow measures (CFMs) could be implemented with central bank digital currency (CBDC), and what benefits, risks and complexities could arise.\n- Several implications of the analysis are highlighted:\n  - CBDC ecosystems should generally be designed such that they can accommodate the introduction of CFMs.\n  - Thanks to the programmability of the payment infrastructure given by the new digital technologies, certain CFMs could likely be implemented more efficiently and effectively with CBDC compared to the traditional system.\n  - Implementing CFMs requires central banks to collaborate on practices and standards.\n  - CFMs on CBDC need to operate alongside traditional CFMs."
    },
    {
      "heading": "Design and operational considerations",
      "content": "- CBDC ecosystem design\n  - Design choices should enable accommodation of CFMs from the outset.\n- Programmability and enforcement\n  - Programmability of CBDC payment infrastructure can allow more efficient and effective implementation of certain CFMs relative to traditional systems.\n- Interoperability and standards\n  - Implementation of CFMs on CBDC requires central banks to collaborate on practices and standards to ensure consistent and effective application.\n- Coexistence with traditional measures\n  - CFMs implemented on CBDC must operate alongside existing traditional CFMs rather than replace them outright."
    },
    {
      "heading": "Subjects and thematic scope",
      "content": "- Balance of payments\n- Capital flow management\n- Capital flows\n- Central Bank digital currencies\n- Digital wallets\n- Economic sectors\n- External position\n- Foreign assets\n- Technology\n\n---\n\n Content in this bundle\n\n- CFMs in the Digital Age\n  - CFMs in the Digital Age (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - CFMs in the Digital Age (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fintech-notes/issues/2023/09/15/capital-flow-management-measures-in-the-digital-age-2-design-choices-for-central-bank-538509"
    }
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    "Authors: Dong He, Annamaria Kokenyne, Tommaso Mancini-Griffoli, Marcello Miccoli, Thorvardur Tjoervi Olafsson, Gabriel Soderberg, Hervé Tourpe",
    "Published: September 15, 2023",
    "Series: Fintech Notes",
    "DOI: https://doi.org/10.5089/9798400252105.063",
    "This fintech note analyzes how capital flow measures (CFMs) could be implemented with central bank digital currency (CBDC), and what benefits, risks and complexities could arise.",
    "Several implications of the analysis are highlighted:",
    "CBDC ecosystem design",
    "Programmability and enforcement",
    "Interoperability and standards",
    "Coexistence with traditional measures",
    "Balance of payments",
    "Capital flow management",
    "Capital flows",
    "Central Bank digital currencies",
    "Digital wallets",
    "Economic sectors",
    "External position",
    "Foreign assets",
    "Technology",
    "**CFMs in the Digital Age**"
  ],
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