Central bank digital currency research around the world: a review of literature

Peterson Ozili

Journal of Money Laundering Control, 2022, vol. 26, issue 2, 215-226

Abstract: Purpose - The purpose of this paper is to gain some insight into central bank digital currency research by reviewing the recent advances in central bank digital currency (CBDC) research in a way that would help researchers, policy makers and practitioners to take a closer look at CBDC. Design/methodology/approach - The paper uses a systematic literature review methodology. Findings - The review shows a general consensus that a CBDC is a liability of the central bank and it has cash-like attributes. The review also presents the motivation and benefits of issuing a CBDC such as the need to increase financial inclusion, the need to improve the conduct of monetary policy and to foster efficient digital payments. The review also shows that many central banks are researching the potential to issue CBDCs due to its many benefits. However, a number of studies have called for caution against over-optimism about the potential benefits of CBDC due to the limiting nature of CBDC design and its inability to meet multiple competing goals. Suggested areas for future research are identified such as the need to find the optimal CBDC design that meets all competing objectives, the need for empirical evidence on the effect of CBDC on the cost of credit and financial stability, and the need to find a balance between limiting the CBDC holdings of users and allowing users to hold as much CBDC as they want, and there is a need to undertake country-specific and regional case studies of CBDC design. Originality/value - This review paper offers new areas for further research in central bank digital currencies.

Keywords: Digital currency; Money; Central bank; Central bank digital currency; CBDC; Digital finance; Cryptocurrency; Financial inclusion; CBDC design; Blockchain; Distributed ledger technology; E42; E44; E52; E58 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (9)

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Working Paper: Central bank digital currency research around the World: a review of literature (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-11-2021-0126

DOI: 10.1108/JMLC-11-2021-0126

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