A new paper from the International Monetary Fund (IMF) explores the challenge of central bank digital currency (CBDC) adoption. It urges central banks to avoid a ‘build and they will come’ attitude, noting considerable adoption challenges by those that have already launched. Two takeaways from the paper are that some of the suggested merchant incentives might compete with consumer benefits. And the small scale central bank survey included has some interesting findings.
The core of the paper is the proposed REDI Framework for adoption. That includes Regulatory strategies, Education, Design choices and Incentive mechanisms.
Amongst the 18 survey respondents, three benefits from the central banker’s perspective stood out. They are the CBDC will provide a digital version of central bank money, increased financial inclusion and reduced costs of cash management.
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