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Central bank digital currencies (CBDC) for the people

Central banks are considering issuing their own digital currencies. The key motivation is expanding access to financial services.

How exactly can central bank digital currencies be developed and deployed to ensure that "non-banked" people have access to basic financial services?

1.7 billion people are unbanked

According to the World Bank: 1.7 billion adults are unbanked. Without access to the services of the formal financial sector, they are forced to resort to alternative options, often at significant cost or risk. The full text of the study by country and region can be downloaded at

Such financial isolation:

  • perpetuates poverty,

  • limits the possibilities

  • does not allow people to protect themselves from difficulties,

  • robs of hope for a better future.

Financial inclusion starts with sending and receiving payments. People need a fast, secure and cheap way to transfer money. Today, central banks meet this need by providing the most accessible form of cash. However, the use of pure cash leaves "non-banking" customers outside the formal financial system and without the data and transaction traces needed to quickly access financial services. This can make it difficult for small businesses to generate savings and access credit.

The payment landscape is changing

Thanks to the spread of digital and mobile technologies. Cash transactions are declining amid the shift to electronic payments , a trend accelerated by the COVID-19 pandemic.

Download a detailed report on accelerating the digitalization of payments in English in PDF format at

Given these changes, it is imperative to work towards bridging the widening digital divide. Central banks and politicians are ready to explore various reforms, including issuing central bank digital money to market participants.

Benefits of using CBDC

CBDCs may lower some of the barriers for "non-banking" clients:

  • potentially prohibitive costs and high transaction fees;

  • minimum account balance;

  • formal confirmation of identity;

  • low level of confidence in bank payments and

  • lack of smartphones in some population groups.

CBDCs are not the only way to overcome these barriers. Central banks are already implementing and improving various fast payment systems (FPSs). Central bank digital currencies are a natural extension of this process. Use of fast payment systems and CBDC:

  • increase competition among payment service providers,

  • will contribute to the offer of new services and reduce costs and

  • expand access to financial services.

Central bank digital currencies will include the unique benefits of central bank money - security, finality, liquidity and integrity .

CBDCs can:

  • eliminate the selfish commercial interests of some payment systems - reduce costs for users,

  • reduce costs by eliminating the credit and liquidity risks inherent in other forms of digital money.

A central bank digital currency has the potential to modernize and integrate payment systems, both domestically and internationally. For countries with limited financial infrastructure, switching to a CBDC mechanism will provide a connection to an inclusive, secure and efficient payment system.

Social aspects of using CBDC

Governments could use CBDC to channel financial support to low-income households:

  • integrate them into financial activities,

  • create an additional channel for them to access other financial services.

The introduction of a central bank digital currency should be accompanied by policy reforms and safeguards to address potential difficulties and risks:

  • low level of financial and digital literacy,

  • operational issues and cybersecurity,

  • exclude the elimination of intermediaries - so that money is not stored in large "wallets" of CBDC, but is used for lending, mortgages and other purposes of economic development.

Using the CBDC will provide people with:

  • control over transaction data,

  • the ability to share transaction data with a wide range of financial service providers,

  • use the built-in strict protection of personal data in the CBDC structure.

Tasks of central banks

  • Balance privacy protection and transparency

  • Ensure financial inclusion and financial integrity

  • Design the type of consumer access: directly or offer digital wallets through banks and non-bank financial service providers

  • Conduct additional dialogues, research and trials to better tune CBDC as a driver of financial inclusion.

Central bankers and other government officials have an obligation to ensure that the financial system is inclusive, open, competitive, and takes into account the needs and interests of all population groups. When properly designed, a CBDC holds great promise for supporting a digital financial system that works for everyone.


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