Tailored CBDC technical assistance in emerging markets
Tailored CBDC technical assistance in emerging markets8 February, 2023 •
Recognising the importance of digital payments as a contributor to financial inclusion, central banks in low-and-middle-income countries (LMICs) are increasingly looking to address the remaining payment needs. Central bank digital currency (CBDC), both in its general-purpose and wholesale form, is one innovation that is receiving attention for its potential in achieving financial inclusion, and contributing to the SDGs, through improved digital payments efficiency.
The extent of impact of CBDC depends on the existing country/regional context, which makes the tailoring of the CBDC design an imperative. But how can such a system be optimally designed so that it overcomes existing challenges related to digital payments, especially in lesser digitised markets?
Cenfri and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) collaborated on the development of a note that highlights different options for CBDC support, specifically technical assistance and capacity building, for LMIC authorities in their general-purpose/retail and wholesale CBDC exploration journeys.
We conclude that the support required depends on the particular CBDC exploration phase. Gaps in support options for authorities remain in the various testing and design phases, and the opportunity for collaboration between the different support agencies is apparent. The note highlights various organisations that offer CBDC-related technical assistance to central banks in LMICs and details alternative avenues of support.