CBDCs are a digital form of central bank money that is different from balances in traditional reserve or settlement accounts (eg balances in accounts held by commercial banks at the central bank)1 . CBDCs are still an incipient DFS, having been officially launched in only a handful of jurisdictions.2;3;4;5 Despite still facing challenges related to user adoption, privacy and scalability, they have the potential to improve competition in several aspects. Importantly, CBDCs can also enhance access to DFS, particularly for underserved populations, by offering a universally accessible and low-cost payment instrument6 .
CBDCs can enable instant payment systems where they’re still lacking. In some countries and regions, an instant payment system is yet to be implemented or, if already done so, widely adopted by consumers. The World Bank’s Global Payment Systems Survey estimated that, among a sample of 93 countries, 61% didn’t have an operational fast payment system in 20217 . High costs and weak incentives to financial institutions are usually at the origin of such absence. A CBDC could be launched as a means of offering a universal, accessible instant payment system for individuals and companies, which would improve competition in payments and transfers.
Also, CBDCs have the potential for unleashing innovative business models, which would broaden the gamut of financial services available for society. The transposition of central bank money to a programmable ledger, where entrepreneurs could launch services still unfeasible or not yet implemented in the traditional finance scenario, could improve financial consumers’ experience, while streamlining regulatory compliance and levelling the competition playing field.
Notwithstanding their potential benefits, an injudicious design can make CBDCs damage competition or financial inclusion. Authorities should be assured that CBDCs complement (and not eliminate) physical cash, which is still the only means of payment accessible to large parts of the population in EMDEs. Besides cash, CBDCs are supposed to integrate with other payment schemes locally available. Finally, scalability remains a pending issue on the path to using CBDCs as fast or instant payment systems; authorities should ponder whether going down this road is the best option cost-wise.
1. Bogaard, H. et al. (2024), “Literature review on financial technology and competition for banking services”, No. 43, BCBS, https://www.bis.org/bcbs/publ/wp43.htm (accessed on 30 August 2025).
2. Reserve Bank of Zimbabwe (2023), Press Statement on the Introduction of the Zimbabwe Gold-Backed Digital Token (ZiG) as a Means of Payment, https://www.rbz.co.zw/documents/press/2023/October/Press_Statement-_Introduction_of_ZiG_as_a_Means_of_Payment_-_5-10-2023.pdf (accessed on 26 August 2025).
3. Ree, J. (2021), Five Observations on Nigeria’s Central Bank Digital Currency, IMF Country Focus, https://www.imf.org/en/News/Articles/2021/11/15/na111621-five-observations-on-nigerias-central-bank-digital-currency (accessed on 19 August 2025).
4. Bank of Jamaica (2022), Say Hello To JAM-DEX, https://boj.org.jm/say-hello-to-jam-dex/ (accessed on 19 August 2025).
5. Sand Dollar (2025), History Sand Dollar - Bahamas, https://www.sanddollar.bs/history (accessed on 19 August 2025).
6. Koonprasert, T. et al. (2024), “Central Bank Digital Currency Adoption: Inclusive Strategies for Intermediaries and Users”, IMF Fintech Notes, No. 2024: 005, IMF, Washington, DC, https://doi.org/10.5089/9798400289422.063.
7. World Bank (2023), A Snapshot Payment Systems Worldwide - Summary Outcomes of the Sixth Global Payment Systems Survey, World Bank, Washington, DC, http://documents.worldbank.org/curated/en/099011624132054588 (accessed on 19 August 2025).
