Cover Image
Read Now

Central Bank Digital Currencies in the Middle East and Central Asia

However, the exact economic and financial impacts of CBDCs need further study and would depend on estimates of CBDC demand, which are uncertain and country- dependent. CBDC issuance and adoption is a long journey that policymakers should approach with care. Policymakers need to analyze carefully whe...

Full description

Bibliographic Details
Main Author: Bouza, Serpil
Other Authors: Hlayhel, Bashar, Kroen, Thomas, Miccoli, Marcello
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2024
Series:Departmental Papers
Subjects:
Payment Systems
Economics
Public Policy
Banks
Finance
Central Bank Digital Currencies
Distributed Ledgers
Financial Services Industry; Technological Innovations
Industries: Financial Services
Banks And Banking
Regimes
Clearinghouses; Banking
Mortgages
Political Economy
International Organization
Standards
Financial Markets
International Institutions
International Economics
Banking
International Agreements And Observance
Depository Institutions
Government And The Monetary System
Commercial Banks
International Organizations
Technology
Financial Institutions
General Financial Markets: Government Policy And Regulation
International Agencies
Micro Finance Institutions
Financial Inclusion
Financial Markets And The Macroeconomy
Monetary Systems
Financial Services Industry
Finance: General
Digital Financial Services
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:However, the exact economic and financial impacts of CBDCs need further study and would depend on estimates of CBDC demand, which are uncertain and country- dependent. CBDC issuance and adoption is a long journey that policymakers should approach with care. Policymakers need to analyze carefully whether a CBDC serves their country’s objectives and whether the expected benefits outweigh the potential costs, in addition to risks for the financial system and operational risks for the central bank
Against the backdrop of a rapidly digitalizing world, there is a growing interest in central bank digital currencies (CBDCs) among central banks, including in the Middle East and Central Asia (ME&CA) region. This paper aims to support ME&CA policymakers in examining key questions when considering the adoption of a CBDC while underscoring the importance of country-specific analyses. This paper does not provide recommendations on CBDC issuance. Instead, it frames the discussion around the following key questions: What is a CBDC? What objectives do policymakers aim to achieve with the issuance of a CBDC? Which inefficiencies in payment systems can CBDCs address? What are the implications of CBDC issuance for financial stability and central bank operational risk? How can CBDC design help achieve policy objectives and mitigate these risks? The paper provides preliminary answers to these questions at the regional level.
A survey of IMF teams and public statements from ME&CA policymakers confirm that promoting financial inclusion and making payment systems more efficient (domestic and cross-border) are the top priorities in the region. Payment services through CBDCs, if offered at a lower cost than existing alternatives, could spur competition in the payment market and help increase access to bank accounts, improve financial inclusion, and update legacy technology platforms. CBDCs may also help improve the efficiency of cross-border payment services, especially if designed to address frictions arising from a lack of payment system interoperability, complex processing of compliance checks, long transaction chains, and weak competition. At the same time, CBDCs could negatively impact bank profitability while introducing a substantial operational burden for central banks.
Physical Description:68 pages
ISBN:9798400263798

Similar Items