The IMF is frequently approached by central banks seeking guidance on the balance between central bank digital currency (CBDC), fast payment systems (FPS), and electronic money (e-money) solutions. Common questions arising include: Do central banks need a CBDC when already equipped with other well-established digital payments systems? For central banks with less-developed solutions: Should central banks establish one system over the other? This discussion is then compounded by the reality of constrained resources. A holistic exploration and decision process on the issuance of retail CBDC requires a comprehensive assessment of legal, macro-financial, and operational considerations.
Authors
- DOI
- https://doi.org/10.5089/9798400289118.063
- ISBN
- 9798400289118
- ISSN
- 2664-5912
- Issue
- 006
- Pages
- 46
- Published in
- United States of America
- Series
- Fintech Notes No 2024/006
- Stock No
- FTNEA2024006
- Volume
- 2024
Table of Contents
- Stylized Models of Retail Payment Systems 9
- Figure 1. Core Components of Retail Payment Systems 9
- Similarities and Differences 11
- Table 1. Payment System Features 11
- Box 1. Closed Loops versus Interoperable Payment Systems 12
- Emerging Developments and Trends in the Payments Landscape 13
- Box 2. Cash Developments in Sweden and the Case for CBDC 14
- Figure 2. Cash Access and Usage in Sweden 14
- Box 3. Design Choices for CBDC That Could Support Financial Inclusion 20
- Box 4. CBDC Exploration in the Context of Different Environments 22
- Box 5. Illustrative Strategy for the Central Bank 30
- How Different Systems Meet Central Banks’ Objectives 16
- Financial Inclusion 16
- Efficiency 16
- Competition 17
- Resilience 18
- Public Access to Central Bank Money 19
- Observations from Central Banks’ Explorations 21
- Common Implementation Constraints 23
- Resource Constraints: Financial Investment and Sustainability 23
- Resource Constraints: Human Capital 25
- Legal, Supervisory, and Oversight Constraints 26
- Timing and Sequencing 27
- Table 2. E-Money Systems 31
- Table 3. Fast Payment Systems 31
- Table 4. Retail Central Bank Digital Currencies 32
- Table 5. Cost Structure in Retail Payments 33
- Figure 4. A Framework to Improve Financial Inclusion 35
- Availability 36
- Table 6. Different Access Points for Retail Payments 36
- Accessibility 37
- Table 7. Types and Examples of Financial Inclusion-Related Retail Payments 37
- Usage 38
- Figure 3. Illustrative Choice Set of Central Banks 30