A Review of Central Bank Digital Currencies for Public Use

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A paper from the IMF paper examines key considerations around central bank digital currency (CBDC) for use by the general public, based on a comprehensive review of recent research, central bank experiments, and ongoing discussions among stakeholders. It looks at the reasons why central banks are exploring retail CBDC issuance, policy and design considerations; legal, governance and regulatory perspectives; plus cybersecurity and other risk considerations. This paper makes a contribution to the CBDC literature by suggesting a structured framework to organize discussions on whether or not to issue CBDC, with an operational focus and a project management perspective.

One small quote from the summary gives a flavour of why central bank digital currencies are an interesting and challenging proposition:

A decision to issue CBDC will stretch the technical capacity and resources of even the best-equipped central banks, in an environment where technology and risks are evolving rapidly. At the same time, outsourcing vital central bank functions to external vendors calls for great care and vigilance, given the functions’ systemic importance and significant financial, operational, and reputational risks to the central bank. Based on a comprehensive survey of published research, this paper aims to suggest general foundations for discussions on whether to issue CBDC, and if the decision is made to go ahead, present concrete operational considerations.

To read the full 66 page paper visit the IMF website page here.

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