The landscape of Central Bank
Digital Currencies (CBDCs) is dynamically evolving, guided by diverse
motivations that vary based on local circumstances. A recent BIS survey,
delving into the intricate fabric of CBDC development, unveils a nuanced
perspective on the relative importance of different factors influencing the
decisions of central banks worldwide.
In this exploration, financial
stability, monetary policy implementation, financial inclusion, payments
efficiency, and safety emerge as key
motivators for central banks considering CBDC issuance. However, the survey
reveals intriguing differences between Advanced Economies (AEs) and Emerging
Market and Developing Economies (EMDEs), shedding light on
jurisdiction-specific motivations that shape the CBDC landscape.
Retail CBDCs: A Tale of
Motivations
In EMDEs, the drive for
financial inclusion takes center stage as a predominant factor motivating CBDC
development. This emphasis on extending access to the unbanked is exemplified
by initiatives like the live CBDC in the Bahamas, where the Sand Dollar aims to
facilitate financial inclusion across remote islands. On the other hand, AEs,
while recognizing the importance of financial inclusion, show a more balanced
distribution of motivations, with payments-related efficiency and safety at the
forefront.
Payment-related motivations,
such as domestic payments efficiency and safety, remain central to both AEs and
EMDEs, reflecting a shared priority in the development of general-purpose
CBDCs. Over time, EMDEs have seen financial stability and monetary policy
emerge as increasingly important motivations, diverging from the trend observed
in AEs.
Wholesale CBDCs:
Navigating Priorities
In contrast to general-purpose
CBDCs, wholesale CBDCs garner less global priority, evident in fewer ongoing
projects and weaker motivation indicators. The motivations driving wholesale
CBDCs closely mirror those of their retail counterparts, with payments-related
efficiency taking precedence. Notably, financial inclusion holds less
significance for wholesale CBDCs, given their focus on transactions between
financial institutions.
Surprisingly, the only area
where motivations for wholesale CBDCs surpass retail CBDCs is in cross-border
payments efficiency. Ongoing central bank experiments underscore the importance
of this aspect, signaling a potential avenue for enhancing cross-border
payments.
Changing Motivations: A
Progression in CBDC Work
As CBDC projects…
