Central Banks Digital Currencies: World Experience

DOI: 10.20542/0131-2227-2021-65-5-68-77
St. Petersburg State University, 62, Chaykovskogo Str., St. Petersburg, 191123, Russian Federation

Received 28.07.2020.

Abstract. The article examines issues related to the introduction of central bank digital currencies (CBDC) for retail payments and wholesale settlements. The study defines and classifies central bank digital currencies, researches the main models of CBDC systems. The article also analyzes the features of various national projects for issuing Central bank digital currencies. The paper uses methods of economic-statistical and functional-structural analysis. The study concludes that CBDC are a new form of central bank money. Digital currencies can be issued in various issuing systems for the purpose of retail payments or wholesale settlements. Among the models of CBDC systems for retail payments (R-CBDC) the direct system model is the most attractive for its simplicity. This model eliminates the dependence of the Central bank on any financial and payment intermediaries. Models of synthetic and hybrid R-CBDC systems are characterized by reliability and speed in processing multiple transactions which makes them the most promising for implementation. Among the models of CBDC systems for wholesale payments (W-CBDC) the model of the system with a universal digital currency (U-W-CBDC) may be the most suitable for eliminating the main disadvantages of modern cross-border payment systems. However, a large number of technological and financial changes as well as the high operating costs of the U-W-CBDC can make such systems difficult to implement for non-developed financial market infrastructure countries. National financial regulators have different motivations for issuing digital currencies. The main advantages of digital currencies for retail payments may consist in providing users with highly liquid, low-risk, universally available means of payment. The main advantages of wholesale digital currencies are that they offer faster, safer, cheaper cross-border payments. The most advanced projects for issuing R-CBDC can be considered DCEP (People’s Bank of China) E-krona (Central Bank of Sweden). The most successful pilot projects for issuing W-CBDC are the projects Jasper (Central Bank of Canada) and Ubin (Monetary Authority of Singapore), which were able to achieve interoperability in conducting cross-border payments. Currently most CBDC are retail based on the use of distributed ledger technology and implemented in the form of DLT-tokens. Countries that develop digital currency systems can be divided into three groups. The first group is countries where the introduction of CBDC can be designed to support the national demand for central bank money (Sweden, Norway, Singapore, etc.). The second group – countries for which the adoption of digital currencies can afford to keep the place of national currencies in international settlements (USA and EU) or expanding the use of national currencies at the international level (China). The third group represents countries for which the introduction of digital currencies may be associated with the control of national monetary circulation and de-dollarization of the financial system (Uruguay, South Africa, Cambodia, etc.).

Keywords: central banks, digital currencies, cryptocurrencies, models of digital currencies systems, retail payments, wholesale settlements


1. Retail CBDCs: The Next Payments Frontier. IBM Blockchain World Wire, Official Monetary and Financial Institutions Forum (OMFIF), 2019. 40 p.

2. Bindseil U. Central Bank Digital Currency – Financial System Implications and Control. European Central Bank, 2019. Available at: https://ssrn.com/abstract=3385283 (accessed 22.06.2020).

3. Kochergin D.A. Mesto i rol’ virtual’nykh valyut v sovremennoi platezhnoi sisteme [The Roles of Virtual Currencies in the Modern Payment System]. Vestnik SPbGU. Seriya 5. Ekonomika, 2017, vol. 33, no. 1, pp. 119-140.

4. Houben R., Snyers A. Crypto-assets: Key Developments, Regulatory Concerns and Responses. Luxembourg, The European Parliament, April 2020. 77 p.

5. Central Bank Digital Currencies. Bank for International Settlements Report, 2018, no. 174. 28 p.

6. Estimate of the Share of Cash in Total Payment Transaction in 38 Countries of Europe in 2019. Available at: https://www.statista.com/statistics/1112656/cash-use-in-europe-by-country/ (accessed 25.06.2020).

7. Kochergin D.A., Yangirova A.I. Tsentrobankovskie tsifrovye valyuty: klyuchevye kharakteristiki i napravleniya vliyaniya na denezhno-kreditnuyu i platezhnuyu sistemy [Central Bank Digital Currencies: Key Characteristics and Directions of Influence on Monetary and Credit and Payment Systems]. Finansy: teoriya i praktika, 2019, vol. 23, no. 4, pp. 80-98.

8. Adrian T., Mancini-Griffoli T. The Rise of Digital Money. International Monetary Fund. Fintech Note, 2019, no. 19/001. 20 p.

9. Kumhof M., Noone C. Central Bank Digital Currencies – Design Principles and Balance Sheet Implications. Bank of England Working Paper, 2018, no. 725. 54 p.

10. Auer R., Bohme R. The Technology of Retail Central Bank Digital Currency. BIS Quarterly Review, 2020, March. 16 p.

11. Central Bank Digital Currency: Opportunities, Challenges and Design. Bank of England Discussion Paper, 2020, March. 57 p.

12. Calle G., Eidan D. Central Bank Digital Currency: an Innovation in Payments. R3 White Paper, 2020, April. 24 p.

13. The (R)evolution of Money II: Blockchain Empowered Central Bank Digital Currencies. Accenture, 2019. Available at: https://www.accenture.com/_acnmedia/pdf-105/accenture-revolution-of-money-ii-2019.pdf (accessed 27.06.2020).

14. Cross-border Interbank Payments and Settlements: Emerging Opportunities for Digital Transformation. Bank of England, Bank of Canada, Monetary Authority of Singapore, 2018, November. 68 p.

15. STELLA Synchronized Cross-Border Payments. European Central Bank, Bank of Japan, 2019, June. 53 p.

16. Ali R., Barrdear J., Clews R., Southgate J. The Economics of Digital Currencies. Bank of England Quarterly Bulletin, 2014, no. 54, pp. 276-286.

17. Boar C., Holden H., Wadsworth A. Impending Arrival – a Sequel to the Survey on Central Bank Digital Currency. BIS Papers, 2020, no. 107. 15 p.

18. Central Banks and Distributed Ledger Technology: How Are Central Banks Exploring Blockchain Today? World Economic Forum’s White Paper, 2019, March. 14 p.

19. Auer R., Cornelli G., Frost J. Covid‑19, Cash, and the Future of Payments. BIS Bulletin, 2020, no. 3. 9 p.

20. Yanagawa N., Yamaoka H. Digital Innovation, Data Revolution and Central Bank Digital Currency. Bank of Japan Working Paper Series, 2019, no. 19-E‑2. 19 p.

21. Fernandez-Villaverde J., Sanches D., Schilling L. et al. Central Bank Digital Currency: Central Banking for All? Federal Reserve Bank of Philadelphia Working Papers, 2020, no. 20-19. 34 p.

22. Report on a Digital Euro. European Central Bank, 2020, October. 55 p.

23. . [Digital Ruble (In Russ.)] Available at: https://cbr.ru/StaticHtml/File/112957/Consultation_Paper_201013.pdf (accessed 25.06.2020).

24. The Riksbank’s E-krona Project. Sveriges Riksbank Report 2, 2018, October. 52 p.

25. The Riksbank to Test Technical Solution for the E-krona. Sveriges Riksbank, 2020. Available at: https://www.riksbank.se/en-gb/press-and-published/notices-and-press-releases/notices/2020/the-riksbank-to-test-technical-solution-for-the-e-krona/ (accessed 27.06.2020).

26. China’s Digital Yuan Will Target Retail Payments First. Coindesk, 2020. Available at: https://www.coindesk.com/chinas-digital-yuan-will-target-retail-payments-first-ex-central-banker-says (accessed 22.06.2020).

27. Enabling Cross-Border High Value Transfer Using Distributed Ledger Technologies. Jasper–Ubin Design Paper Monetary Authority of Singapore. Monetary Authority of Singapore, Bank of Canada, Accenture, 2019. 44 p.

28. Inthanon-LionRock: Leveraging Distributed Ledger Technology to Increase the Efficiency of Cross-Border Payments. Bank of Thailand, Hong Kong Monetary Authority, 2020. 90 p.

29. Central Bank Group to Assess Potential Cases for Central Bank Digital Currencies. Bank for International Settlements. Available at: https://www.bis.org/press/p200121.htm (accessed 25.06.2020).

Registered in System SCIENCE INDEX

For citation:
Kochergin D. Central Banks Digital Currencies: World Experience. World Eonomy and International Relations, 2021, vol. 65, no. 5, pp. 68-77. https://doi.org/10.20542/0131-2227-2021-65-5-68-77

Comments (0)

No comments

Add comment






Dear authors! Please note that in the VAK List of peer-reviewed scientific journals, in which the main scientific results of dissertations for the degree of candidate and doctor of sciences should be published for the “MEMO Journal” the following specialties are recorded:
economic sciences:
5.2.5. World Economy.
5.2.1. Economic Theory
5.2.3. Regional and Branch Economics
political sciences:
5.5.4. International Relations
5.5.1. History and Theory of Politics
5.5.2. Political Institutions, Processes, Technologies


Current Issue
2024, vol. 68, No. 4
Topical Themes of the Issue:
  • Financial Contagion Propagation in Europe under the Impact of Global Shocks
  • Regional Powers on the African Continent: Trends and Prospects
  • Investment Activity of the PRC in the Kyrgyz Republic
  • “Land Grabbing” Concept: Global and National Aspects
Submit an Article
The Editorial Board invites authors to write analytical articles on the following topics:
  • changes in the processes of globalization in modern conditions
  • formation of the new world order
  • shifts in civilization at the stage of transition to a digital society

The editors are also interested in publishing synthesis articles / scientific reviews revealing the main trends in the development of certain regions of the world - Latin America, Africa, South Asia, etc.