## Central Bank Digital Currency (CBDC) - Virtual Handbook

## Source details

**Canonical URL:** [Central Bank Digital Currency (CBDC) - Virtual Handbook](https://www.imf.org/en/topics/digital-payments-and-finance/central-bank-digital-currency/virtual-handbook)

## Other formats

- [Markdown version](/en/topics/digital-payments-and-finance/central-bank-digital-currency/virtual-handbook/index.md)
- [Structured JSON version](/en/topics/digital-payments-and-finance/central-bank-digital-currency/virtual-handbook/index.json)
- [Bundle manifest](/en/topics/digital-payments-and-finance/central-bank-digital-currency/virtual-handbook/bundle-manifest.json)

---

### Overview
- The IMF’s Central Bank Digital Currency (CBDC) Virtual Handbook is a reference guide for policymakers and experts at central banks and ministries of finance and serves as the basis for the IMF’s engagement with country authorities and other stakeholders.
- Focus: practical tools and resources to support IMF member countries in planning implementation of the 2025 System of National Accounts (SNA) and BPM7.
- Aims: help define scope, develop communication and dissemination strategies, engage stakeholders, and build realistic, well-governed implementation plans tailored to country circumstances.
- Features: country case studies to share experiences and lessons learned and foster peer learning and collaboration.
- Last Updated: July 2026

### 1. How Should Countries Explore CBDCs?
- Presents a dynamic framework that is iterative, flexible, and responsive to new information.
- Key sequential (but non-linear) steps:
  - Clearly establish policy objectives of CBDCs and relevant success measures.
  - Identify and quantify risks where possible and develop strategies to contain them.
  - Assess domestic capacity to experiment with, regulate, oversee, and implement CBDCs.
  - Develop a communication strategy to guide stakeholder engagement early on.
  - Establish a set of feature requirements based on previous steps.
  - Ensure a sound legal basis and robust regulatory foundations from the start.
- Emphasis: exploration should continue even beyond issuance given rapid technological developments and evolving lessons worldwide.

### 2. How Can Central Banks Manage CBDC Product Development?
- Introduces the "5P methodology" to guide exploration and development from research to potential launch.
- The 5P methodology comprises five phases:
  - Preparation: research trends, define objectives, establish success criteria, evaluate feasibility, assess capacity, analyze risks.
  - Proof-of-concept: small-scale empirical tests and validation, typically in a laboratory environment.
  - Prototype: development or acquisition of necessary technologies and selection of partners.
  - Pilot: live testing of a quasi-final product.
  - Production: final issuance and operation of the CBDC.
- Purpose: facilitate experimentation, support progressive decision-making, and manage risks; draws on experiences from various jurisdictions and best practices across industries.

### 8. CBDC Adoption: Inclusive Strategies for Intermediaries and Users
- Observation: among jurisdictions with launched CBDCs or large-scale pilots, adoption remains slow and limited.
- Key barriers: chicken-and-egg adoption problem between consumers and merchants.
- Recommendation: emphasize adoption early in the CBDC journey through strategic policy and design choices that encourage end-user and intermediary involvement from the outset.
- Introduces a framework of measures:
  - Regulatory strategies
  - Education and communication initiatives
  - Design and deployment choices
  - Incentive mechanisms to prepare for and manage adoption

### 11. Cross-Border Payments with Retail CBDCs: Design and Policy Considerations
- Retail CBDC can improve cross-border payments by being a safe, liquid asset that reduces reliance on intermediaries and settlement risks.
- CBDC provides a clean slate to redesign and optimize cross-border payment processes.
- Distills design and policy considerations across payment steps: access, communication, currency conversion, compliance, and settlement.
- Recommendation: consider cross-border implications early to avoid unintended barriers, even if CBDC is initially intended for domestic use.
- Emphasis on adoption of international standards, access policy evaluation, and international cooperation.

### 12. Evaluating the Implications of CBDC for Financial Stability (NEW)
- Identifies six key transmission channels through which CBDC can affect financial stability—positively or negatively:
  - bank funding and lending
  - fee income
  - run risk
  - information flows
  - payment system resilience
  - (sixth channel implied within the chapter context)
- Synthesizes findings from existing studies that quantify some effects and explores how outcomes are shaped by country-specific characteristics, CBDC adoption, and design features.
- Provides practical guidance on analytical tools and models to evaluate financial stability risks.
- Discusses risk containment via appropriate CBDC design and safeguards.

### 13. The Impact of Central Bank Digital Currency on Payments Competition (NEW)
- CBDC can affect payments competition as a payment instrument and as platform infrastructure for intermediaries.
- Competitive impact depends on existing payments landscape, regulation, and CBDC design.
- Potential benefits in less competitive markets via four channels:
  - pricing discipline
  - quality improvements
  - increased contestability
  - broader financial access
- In more competitive markets, effects may be more muted and operate through broader access to payments.
- Policy levers to foster competition: intermediary participation rules, fee structures, holding limits, and interoperability standards.

### 14. Selected Legal Considerations for Central Bank Digital Currencies (NEW)
- rCBDC legal considerations:
  - mechanisms through which rCBDC is sanctioned as a currency
  - legal basis for issuance and provision of a payment platform
  - central bank’s mandate to regulate rCBDC service providers
  - legal relationships in the rCBDC landscape and assessment of legal risks
  - design-feature legal implications: holding and transaction limits, fee caps, interest accrual, programmability, offline capabilities
- wCBDC legal considerations:
  - legal nature of wCBDC
  - central bank’s mandate to issue wCBDC and operate its platform (directly or through third parties)
  - legal relationships between the central bank and users
  - settlement finality of wCBDC transactions

### 15. Financial Integrity Implications of Retail Central Bank Digital Currencies (rCBDCs) (NEW)
- Focus: application of international AML/CFT standards in an rCBDC setting.
- Identifies main categories and characteristics of rCBDCs with potential financial integrity implications.
- Analyzes how rCBDC features might impact effective implementation of an issuing jurisdiction’s AML/CFT regime.
- Provides guidance and suggested good practices for policymakers and competent authorities to consider prior to rCBDC launch and to inform rCBDC designs.
- Highlights current challenges and open questions given novelty of rCBDCs and limited practical experience.

### 16. Payment Resilience in Fragile and Conflict-Affected States: Lessons for CBDC (NEW)
- Explores how Fragile and Conflict-affected States (FCS) can strengthen payment ecosystem resilience against disruptions from conflict, natural disasters, or infrastructure failures.
- Introduces a framework to assess vulnerabilities across payment ecosystem layers:
  - connectivity infrastructure
  - payment infrastructure
  - intermediaries
  - payment solutions
  - user access
- Draws on experiences from Ukraine, West Bank and Gaza, Haiti, the CEMAC region, Tuvalu, Sudan, and Yemen.
- Highlights practical strategies such as offline functionality, redundancy, and interoperability that CBDC and digital innovations could mimic.
- Lessons are grounded in fragile settings but have broader relevance for preparedness and payment continuity.

### 17. Central Bank Exploration of Tokenized Reserves (NEW)
- Addresses how central banks should explore tokenized reserves—making reserves available to selected banks using distributed ledger technology.
- Covers:
  - policy objectives for tokenized reserves
  - operating models and central bank roles
  - implications for monetary policy implementation
  - alternative solutions
  - implementation strategies
- Emphasizes that strategic decisions and policy options will vary across jurisdictions reflecting differences in resources, legal systems, and policy priorities.

---

## Content in this bundle

- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2023/english/ftnea2023007.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2023/english/ftnea2023007.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2023/english/ftnea2023008.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2023/english/ftnea2023008.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2024/english/ftnea2024002.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2024/english/ftnea2024002.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2024/english/ftnea2024005.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2024/english/ftnea2024005.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2025/english/ftnea2025006.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2025/english/ftnea2025006.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2025/english/ftnea2025007a.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2025/english/ftnea2025007a.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2025/english/ftnea2025008.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2025/english/ftnea2025008.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2025/english/ftnea2025009a.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2025/english/ftnea2025009a.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2025/english/ftnea2025010.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2025/english/ftnea2025010.pdf){rel="external" type="application/pdf"}
- **Read the Chapter**
  - [Read the Chapter (Markdown version)](/-/media/files/publications/ftn063/2025/english/ftnea2025011.pdf.md){rel="alternate" type="text/markdown"}
  - [Read the Chapter (PDF)](/-/media/files/publications/ftn063/2025/english/ftnea2025011.pdf){rel="external" type="application/pdf"}

---

## References

- [Digital Payments and Finance](https://www.imf.org/en/topics/digital-payments-and-finance)

_Source: https://www.imf.org/en/topics/digital-payments-and-finance/central-bank-digital-currency/virtual-handbook_