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 contribute to the SDGs, through improved digital payments efficiency.
The extent of the impact of CBDC depends on the existing country/regional context, which makes the tailoring of the CBDC design 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 this 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.