According to a new paper titled “Central banks digital currencies: a new instrument in the financial inclusion toolkit?” published by the Bank for International Settlements (BIS) Financial Stability Institute and the World Bank, this final component is changing. Brazil, Hong Kong, Mexico, South Africa, and the United Arab Emirates are among the nations represented in the study.
According to a volume of papers published by the Bank for International Settlements (BIS), payment system efficiency is the primary motivator for central banks in developing market nations that are experimenting with or contemplating central bank digital currencies (CBDCs).
Public discussion regarding CBDCs has assumed or reached the conclusion that they should be two-tiered, with banks serving as the principal channel between the central bank and the public. The two-tiered distribution design, which has centred on protecting banks’ traditional business model—depositors whose funds can be lent out—as much as it has on design efficiency and preventing central banks from having retail depositor accounts.
It also emphasises that central banks in emerging market economies promote financial inclusion and pay close attention to cyber security threats, possible bank disintermediation, and cross-border spillovers.
The document, which was released on April 14, is made up of a series of papers prepared for a conference of deputy governors of central bank from developing economies on February 9 and 10. It states:
“Providing a cash-like digital means of payment, in light of reduced cash usage and an increase in private digital payment services, is the most common consideration [for CBDB issuance].
