Fintech, Cryptocurrencies, and CBDC: Financial Structural Transformation in China”

Franklin Allen, Xian Gu and Julapa Jagtiani

No 22-12, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: Fintech and decentralized finance have penetrated all areas of the financial system and have improved financial inclusion in the last decade. In this paper, we review the recent literature on fintech, cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs). There are important implications from the rise of fintech and the introduction of stablecoins and CBDCs in recent years. We provide an overview of China’s experience in fintech, focusing on payments, digital banking, fintech lending, and the recent progress on its CBDC pilots (e-CNY). We also discuss important considerations in designing effective cryptocurrency regulations. Cryptocurrency regulations could promote growth of innovations through enhanced public confidence in this market. The e-CNY could become mainstream in the global market through effective regulations, which provide incentives and protection to market participants. A key factor to success for digital currencies has been their widespread adoption. If the Chinese e-CNY were to become a mainstream currency, the introduction of CBDC could potentially offer solutions to existing problems inherent in traditional financial systems.

Keywords: fintech; cryptocurrency regulations; stablecoins; CBDCs; e-CNY; China (search for similar items in EconPapers)
JEL-codes: G18 G21 G28 L21 (search for similar items in EconPapers)
Pages: 31
Date: 2022-04-11
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cna, nep-fdg, nep-fle, nep-mon, nep-ore and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (62)

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Related works:
Journal Article: Fintech, Cryptocurrencies, and CBDC: Financial Structural Transformation in China (2022)
Working Paper: Fintech, Cryptocurrencies, and CBDC: Financial Structural Transformation in China (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:93944

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DOI: 10.21799/frbp.wp.2022.12

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