BIS reports on CBDCs in emerging markets

GOING DIGITAL: Greater financial inclusion is one of the top motivations for issuing a CBDC

Providing a cash-like digital means of payment, increasing private digital payment services, supporting financial inclusion and achieving greater payment system efficiency are among the key motivations driving initiatives to develop central bank digital currencies (CBDCs) in emerging market economies around the world, according to a Bank for International Settlements (BIS) report.

BIS’s 214-page ‘CBDCs in Emerging Market Economies’ report includes discussion papers prepared by 26 central banks across Asia, Africa, the Middle East and South and Central America that lay out the main objectives, challenges and implications for the issuance of a CBDC in each of the countries represented.

The papers were prepared for a meeting of central bank deputy governors held in February when participants also took part in a survey on the roles of and considerations for CDBCs in emerging market economies (EMEs).

“Many papers in this volume discuss the key motivations for CBDC issuance as well as the primary concerns,” BIS says.

“Achieving greater payment system efficiency is at the heart of EME central banks’ motivations. EME central banks also place great emphasis on financial inclusion and are concerned about cyber security risks, potential bank disintermediation and cross-border spillovers.  

“A related topic discussed is the value added of CBDCs for existing payment systems, and country papers offer concrete examples of deliberations on this topic at the current juncture.

“Another area covered by the papers in this volume is CBDC design considerations. Many EME central banks are of the view that careful design can keep risks to a minimum, while yielding net benefits.”

‘CBDCs in Emerging Market Economies’ can be downloaded here.

Institutions that contributed papers to the report include Central Bank of Argentina, Central Bank of Chile, People’s Bank of China, Hong Kong Monetary Authority, Reserve Bank of India, Bank Indonesia, Bank Negara Malaysia, Bank of Mexico, Central Bank of the Russian Federation, Saudi Central Bank, Monetary Authority of Singapore, South African Reserve Bank, Central Bank of the Republic of Turkey and Central Bank of the UAE.

BIS published a working paper on CBDC initiatives around the world in August 2020.

BIS reports on CBDCs in emerging markets was written by Tom Phillips and published by NFCW.