The Effects of CBDCs on Mobile Money and Outstanding Loans: Evidence from the eNaira and SandDollar Experiences

Francisco Elieser Giraldo-Gordillo and Ricardo Bustillo-Mesanza ()
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Francisco Elieser Giraldo-Gordillo: Department of Public Policies and Economic History, University of the Basque Country, UPV/EHU, 48015 Bilbao, Spain
Ricardo Bustillo-Mesanza: Department of Public Policies and Economic History, University of the Basque Country, UPV/EHU, 48015 Bilbao, Spain

FinTech, 2025, vol. 4, issue 3, 1-17

Abstract: This paper measures the post-treatment effects of Central Bank Digital Currencies (CBDCs) on mobile money and outstanding loans from commercial banks as a percentage of the GDP in Nigeria and the Bahamas, respectively, from the perspective of financial inclusion. The literature on the topic has primarily focused on the technological specifications of CBDCs and their potential future implementation. This article addresses a gap in the empirical literature by examining the effects of CBDCs. To this end, a Synthetic Control Method (SCM) is applied to the Bahamas (SandDollar) and Nigeria (eNaira) to construct a counterfactual scenario and assess the impact of CBDCs on mobile money and commercial bank loans. Nigeria’s mobile money transactions as a percentage of the GDP increased significantly compared to the synthetic control group, suggesting a notable positive effect of the eNaira. Conversely, in the Bahamas, actual performance fell below the synthetic control, implying that SandDollar may have contributed to a decline in outstanding loans. These results suggest that CBDCs could pose a “deposit substitution risk” for commercial banks. However, they may also enhance the performance of other Fintech tools, as observed in the case of mobile money. As CBDC implementations worldwide remain in their early stages, their long-term effects require further analysis.

Keywords: Central Bank Digital Currencies—CBDC; eNaira; Fintech; financial inclusion; liquidity risk; mobile money; SandDollar (search for similar items in EconPapers)
JEL-codes: C6 F3 G O3 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jfinte:v:4:y:2025:i:3:p:39-:d:1717837

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