A Guide To Central Bank Digital Currency Product Development

As central bank digital currency (CBDC) projects progress around the world, there is increased need for a project management methodology that is appropriate for CBDC. This paper develops a CBDC-specific project management methodology that establishes a common terminology and offers guidance to development teams on best practices for addressing the complex requirements and risks associated with CBDC. It is centered on an original five-step approach called the “5P Methodology”: preparation, proof-of-concept, prototypes, pilots, and production. The methodology emphasizes a phased approach to CBDC research and development, with strong focus on research preparation, experimentation and testing, risk management, stakeholder engagement, and cyber resilience.

The paper briefs the Executive Board on the initial considerations on CBDC. These cover a framework to guide countries’ CBDC exploration, as well as implications for monetary policy transmission, capital flow management measures, and financial inclusion.

The global central banking community is actively exploring Central Bank Digital Currencies (CBDCs), which may have a fundamental impact on both domestic and international economic and financial stability. Over 40 countries have approached the IMF to request assistance through CBDC capacity development (CD). Current IMF CBDC CD efforts have focused on facilitating peer learning and developing analytical underpinnings for staff advice to member countries. CD missions have aimed at helping country authorities answer questions about how to think about CBDCs. With more available country experiments and empirical evidence, IMF CD will evolve to provide increased value-added advice more tailored to country circumstances and more solidly anchored in empirical and analytical work, and strengthen synergies with surveillance. This paper sketches a multi-year strategy to address frequently asked questions related to CBDC and outlines the process for developing a CBDC Handbook which will document emerging lessons, analytical findings, and policy views. The paper (1) explains the IMF’s approach to CBDC CD; (2) summarizes member countries’ emerging questions and challenges regarding CBDC; and (3) introduces the CBDC Handbook by motivating its scope and elucidating its governance structure.

We study the optimal design of a central bank digital currency (CBDC) in an environment where agents sort into cash, CBDC and bank deposits according to their preferences over anonymity and security; and where network effects make the convenience of payment instruments dependent on the number of their users. CBDC can be designed with attributes similar to cash or deposits, and can be interest-bearing: a CBDC that closely competes with deposits depresses bank credit and output, while a cash-like CBDC may lead to the disappearance of cash. Then, the optimal CBDC design trades off bank intermediation against the social value of maintaining diverse payment instruments. When network effects matter, an interest-bearing CBDC alleviates the central bank's tradeoff.

This publication analyzes the evolution of Central Bank Digital Currencies (CBDC) in Asia and the Pacific, assesses their potential risks and technical challenges, and explores their potential to improve cross-border payments and financial inclusion. Ahead of the launch of any large-scale Asian CBDC, it details various models and explores how Cambodia, the People’s Republic of China, Singapore, and Thailand are taking the lead. Outlining global developments and emerging trends, it shows why a robust digital infrastructure, strong public-private collaboration, and fintech literacy are central to ensuring CBDCs help drive the transition to a digital economy.

Digitalization is reshaping economic activity, shrinking the role of cash, and spurring new digital forms of money. Central banks have been pondering wheter and how to adapt. One possibility is central bank digital currency (CBDC)-- a widely accessible digital form of fiat money that could be legal tender. This discussion note proposes a conceptual framework to assess the case for CBDC adoption from the perspective of users and central banks. It discusses possible CBDC designs, and explores potential benefits and costs, with a focus on the impact on monetary policy, financial stability, and integrity. This note also surveys research and pilot studies on CBDC by central banks around the world.

This paper examines key considerations around central bank digital currency (CBDC) for use by the general public, based on a comprehensive review of recent research, central bank experiments, and ongoing discussions among stakeholders. It looks at the reasons why central banks are exploring retail CBDC issuance, policy and design considerations; legal, governance and regulatory perspectives; plus cybersecurity and other risk considerations. This paper makes a contribution to the CBDC literature by suggesting a structured framework to organize discussions on whether or not to issue CBDC, with an operational focus and a project management perspective.

Central Bank Digital Currencies (CBDCs): A Comprehensive Guide to the Future of Money Demystify the world of Central Bank Digital Currencies (CBDCs) and explore their potential to revolutionize the financial landscape. This comprehensive ebook dives deep into everything you need to know about CBDCs, from their core functionalities to their far-reaching implications. Unveiling the Transformative Potential of CBDCs Enhanced Efficiency: Discover how CBDCs can streamline payments, reduce transaction costs, and accelerate financial processes for individuals and businesses alike. Financial Inclusion for All: Explore how CBDCs can empower the unbanked population by providing secure access to financial services. Transparency and Security: Understand how CBDCs leverage secure digital ledger technology to promote transparency and accountability in financial transactions. Innovation Unleashed: Dive into the exciting new applications of CBDCs, such as programmable money, smart contracts, and more, opening doors to a world of financial possibilities. Beyond the Basics: A Look at the Road Ahead Building a Robust Framework: Learn about the crucial considerations for developing a secure and legally sound regulatory environment for CBDCs. The Power of Collaboration: Explore the significance of international cooperation between governments, central banks, and the private sector for successful CBDC implementation. Addressing Key Challenges: Gain insights into the potential hurdles associated with CBDCs, such as ensuring user privacy, achieving interoperability, and mitigating financial risks. A Call for Responsible Innovation This ebook equips you with the knowledge to navigate the ongoing conversation about CBDCs. It emphasizes the importance of responsible development, prioritizing user privacy, security, and financial inclusion as core principles. Whether you're a seasoned finance professional, a curious investor, or simply someone interested in the future of money, this ebook is your one-stop resource for understanding Central Bank Digital Currencies.