Understanding the rapid development of CBDC in emerging economies

Shaen Corbet, Douglas Cumming, Zachary Glatzer and Sofia Johan

Finance Research Letters, 2024, vol. 70, issue C

Abstract: Central Bank Digital Currencies (CBDCs) mark a significant evolution in digital finance. This study examines the factors influencing CBDC adoption, highlighting the roles of regulatory quality and digital financial access. Results indicate that regulatory frameworks, rather than the level of digital infrastructure, predominantly drive CBDC initiatives. The findings caution against the rapid deployment of CBDCs in less prepared environments, which could pose risks to financial stability. The research underscores the importance of comprehensive regulatory strategies over technological readiness for successful CBDC implementation. Developed markets are advised to consider policies that mitigate risks associated with the transition towards digital currencies.

Keywords: Central bank digital currencies; Financial development; Monetary policy; Governance; Regulation (search for similar items in EconPapers)
JEL-codes: E42 E51 E58 G28 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324012558

DOI: 10.1016/j.frl.2024.106226

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