Fintech Notes

Central Bank Digital Currency's Role in Promoting Financial Inclusion

Author/Editor:

Ashley Lannquist ; Brandon Tan

Publication Date:

September 22, 2023

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Financial inclusion is a key policy objective that central banks, especially those in emerging and low-income countries, are considering for retail central bank digital currency (CBDC). If properly designed to address the barriers to financial inclusion, CBDCs have the opportunity to gain acceptance by the financially excluded for digital payments. CBDC can then serve as an entry point to the broader formal financial system. CBDC has special aspects that may benefit financial inclusion, such as being a risk-free and widely acceptable form of digital money, availability for offline payments, and potentially lower costs and greater accessibility. However, CBDC is not a panacea to financial inclusion, and additional experience is needed to fully understand its potential impact.

Series:

Fintech Notes No 2023/011

Subject:

Central Bank digital currencies Digital financial services Economic sectors Financial inclusion Financial markets Financial services Payment systems Technology

Frequency:

occasional