Template-Type: ReDIF-Paper 1.0
Author-Name: Erik Feyen
Author-X-Name-First: Erik
Author-X-Name-Last: Feyen
Author-Name: Jon Frost
Author-X-Name-First: Jon
Author-X-Name-Last: Frost
Author-Name: Harish Natarajan
Author-X-Name-First: Harish
Author-X-Name-Last: Natarajan
Author-Name: Tara Rice
Author-X-Name-First: Tara
Author-X-Name-Last: Rice
Title: What does digital money mean for emerging market and developing economies?
Abstract: Proposals for global stablecoins have put a much-needed spotlight on deficiencies in financial inclusion and cross-border payments and remittances in emerging market and developing economies (EMDEs). Yet stablecoin initiatives are no panacea. While they may achieve adoption in certain EMDEs, they may also pose particular development, macroeconomic and cross-border challenges for these countries and have not been tested at scale. Several EMDE authorities are weighing the potential costs and benefits of central bank digital currencies (CBDCs). We argue that the distinction between token-based and account-based money matters less than the distinction between central bank and non-central bank money. Fast-moving fintech innovations that are built on or improve the existing financial plumbing may address many of the issues in EMDEs that both private stablecoins and CBDCs aim to tackle.
Length: 26 pages
Creation-Date: 2021-10
File-URL: https://www.bis.org/publ/work973.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work973.htm
File-Format: text/html
Number: 973
Keywords: fintech, stablecoins, crypto-assets, e-money, central bank digital currencies, emerging market and developing economies, financial inclusion, remittances, payments
Classification-JEL: E42, E51, E58, F31, G28, O33
Handle: RePEc:bis:biswps:973