After Libra, Digital Yuan and COVID-19: Central Bank Digital Currencies and the New World of Money and Payment Systems

Abstract

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Impact of digital financial inclusion on ASEAN banking stability: implications for the post-Covid-19 era

“…The Covid-19 pandemic can be considered as a game-changer for DFI through which the lower-income households and small firms can have more advantages by using mobile money transactions, Fintech services (Allmen et al , 2020) and digital payments as well which were never seen before (Arner et al , 2020). In line with this, the global banking industry is in the way of implementing DFI in full swing to face this pandemic.…”

“…The Covid-19 pandemic, considered one of the biggest global crises, has brought a drastic impact on the global financial sector (Narayan, 2020a; Phan and Narayan, 2020). The nationwide social distancing, quarantine and lockdown measures have affected all the sectors and brought insurmountable social and economic consequences causing an unprecedented and multi-dimensional strain on stock markets, businesses, the health sector, societies and individuals as well (Narayan et al , 2021; Yang and Deng, 2021; Arner et al , 2020). However, the banking sector is more vulnerable in this pandemic (Wójcik and Ioannou, 2020) as the majority of the economic activities of human civilisation are directly or indirectly related to and carried out through this sector (Banna et al , 2020a).…”

Circular Economy and Central Bank Digital Currency

“…Ozili (2022b) shows that there is a need to: (i) determine the optimal CBDC design that meets all competing objectives, (ii) determine the effect of CBDC on the cost of credit, (iii) the effect of CBDC on financial stability, and (iv) find a balance between limiting the CBDC holdings of users and allowing users to hold unlimited units of CBDC. Arner et al (2020) suggest that most central banks should focus on transforming their existing payment systems rather than on rolling out a central bank digital currency. Davoodalhosseini (2021) shows that having both cash and a CBDC available to people at the same time may result in lower welfare than in the cases where only cash or only a CBDC is available.…”

Blockchain Application for Central Banks: A Systematic Mapping Study

“…These escalate the cost of back-office procedures and inflate certain risks such as: operational risk, chains of settlement failures (as delayed settlement of one transaction may affect the settlement of trades with third parties), human errors (the system being reconciled manually) and limited collateral fluidity [64]. Overall, all payment systems suffer from settlement or payment risks for technical or financial reasons, such as settlement, credit and market risks [101].…”

“…This type of DLT uses features such as: permission restriction, multiple controlling authorities; they allow easy, yet controlled information sharing between various stakeholders and more. Although we have identified a small number of research studies on the potential application of permissionless blockchain for business of central banks [77], [101], the predominant consensus amongst the research community is that the permissioned access model is the preferred type of blockchain by such institutions [21], [22], [27], [36], [51]- [55], [57], [58], [58], [61], [66], [69], [86], [101]. Consortium or federated blockchain access type was not available in the included peer-reviewed publications on DLT applications for the business of central banks.…”