Global Experience of Central Bank Digital Currency Research and Implementation: The Institutional Aspect
Kornіvska V. O.

Kornіvska, Valerіia O. (2023) “Global Experience of Central Bank Digital Currency Research and Implementation: The Institutional Aspect.” The Problems of Economy 1:23–31.
https://doi.org/10.32983/2222-0712-2023-1-23-31

Section: World economy and international relations

UDC 330.34:330.88

Abstract:
The purpose of the article is to disclose the influence of institutional factors on the formation of the effects of the introduction of a central bank digital currency and to substantiate the prerequisites for the possible introduction of a central bank digital currency (CBDC) in the Ukrainian system of financial and institutional coordinates. The carried out study concludes that the global regulatory community has no final certainty about the very fact of creating such a revolutionary payment mechanism. At the same time, approaches to the design, goals, and possible results of putting the CBDC into circulation are focused on functional areas of analysis, while the issue of the influence of the institutional environment on the formation of the effects of the digital transformation of the monetary space requires a more thorough research. The search for answers to the question of how to use the CBDC to form a controlled, inclusive, transparent, and efficient financial and institutional space should include, as an essential constituent, an analysis of trust in the actions of the government and the central bank at each stage of the CBDC development. The poor and complex experience of introducing the CBDC demonstrates that in the absence of a sufficient level of trust, the financial, economic, and social situation becomes destabilized. The experience of introducing digital currency in an unstable economic environment shows that a central bank’s digital currency can be introduced only if there is a high level of trust in the national currency, the monetary policy pursued by the central bank, and a low level of inflation; the conversion of the national currency into digital form should be preceded by an effective monetary policy aimed at increasing the reliability of the national currency. The author concludes that, given the revolutionary nature of the reform, the introduction of digital currency cannot be used as an element of stabilization measures and cannot be considered a monetary experiment; its prospects should be conditioned by general economic and monetary stabilization.

Keywords: digital transformations, central bank digital currency, institutional environment, trust.

Bibl.: 32.

Kornіvska Valerіia O. – Doctor of Sciences (Economics), Senior Research Fellow, Department of Economic Theory, Institute for Economics and Forecasting of NAS of Ukraine (26 Panasa Myrnoho Str., Kyiv, 01011, Ukraine)
Email: vkornivska@ukr.net

List of references in article

“Payments. Top trends 2023. Sapgemini“. https://prod.ucwe.capgemini.com/wp-content/uploads/2023/01/Top-Trends-Payments-2023.pdf
Denecker, O. et al. “Central bank digital currencies: An active role for commercial banks“. Mckinsey. https://www.mckinsey.com/industries/financial-services/our-insights/central-bank-digital-currencies-an-active-role-for-commercial-banks
Hermans, L. et al. “Decrypting financial stability risks in crypto-asset markets“. European Central Bank. May 2022. ecb.europa.edu
“Ukraina v triitsi svitovykh lideriv z vykorystannia kryptoaktyviv“ [Ukraine Is in the Top Three World Leaders in the Use of Crypto-assets]. Fintechinsider. https://fintechinsider.com.ua/ukrayina-v-trijczi-svitovyh-lideriv-z-vykorystannya-kryptoaktyviv-do-chogo-tut-vijna-ta-yak-cze-vykorystaty-z-korystyu/
Mishchenko, V. I., Naumenkova, S. V., and Mishchenko, S. V. “Teoretychni zasady ta praktychni aspekty vprovadzhennia i vykorystannia tsyfrovykh hroshei“ [Theoretical Principles and Practical Aspects of the Introduction and Use of Digital Money]. Ekonomichna teoriia, no. 2 (2022): 44-66. DOI: 10.15407/etet2022.02.044
Agur, I. “A Ari and G Dell'Ariccia. Designing central bank digital currencies“. Journal of Monetary Economics, vol. 125 (2022): 62-79.
Alberola, E., and Mattei, I. “Central bank digital currencies in Africa“. BIS. Papers no. 128. https://www.bis.org/publ/bppdf/bispap128.pdf
Auer, R. “Central bank digital currencies: motives, economic implications and the research frontier“. BIS, Working Papers no. 976, November (2021).
Fernandez-Villaverde, J. et al. “Central bank digital currency: Central banking for all?“ Review of Economic Dynamics, vol. 41 (2021): 225-242.
Kosse, A., and Mattei, I. “Gaining momentum - results of the 2021 BIS survey on central bank digital currencies“. BIS, Papers no. 125 (2022).
Naumenkova, S. V., Mishchenko, V. I., and Mishchenko, S. V. “Tsyfrovi valiuty u konteksti suspilnoi doviry do hroshei“ [Digital Currencies in the Context of Public Trust in Money]. Financial and Credit Activity Problems of Theory and Practice, vol. 2 (25) (2018): 305-316. DOI: 10.18371/fcaptp.v2i25.136869
Sharov, O. M. “Hlobalizatsiia hroshei. Ekonomiosofskyi / monetarosofskyi traktat z pytannia evoliutsii hroshei“ [Globalization of Money. Economiosophical / Monetarosophical Treatise on the Issue of the Evolution of Money]. Kyiv, 2022. http://ief.org.ua/wp-content/uploads/2022/12/Globalizacija-groshey.pdf
Khutorna, M. E., Zaporozhets, S. V., and Tkachenko, Yu. P. “Tsyfrovi valiuty tsentralnykh bankiv: svitovi trendy ta perspektyvy v Ukraini“ [Digital Currencies of Central Banks: Global Trends and Prospects in Ukraine]. Sotsialna ekonomika, no. 61 (2021): 123-134. DOI: 10.26565/2524-2547-2021-61-12
Hudima, T. “Tsyfrova valiuta tsentralnoho banku: osoblyvosti vprovadzhennia ta vplyv na hroshovo-kredytnu polityku“ [Digital Currency of the Central Bank: Features of Implementation and Impact on Monetary Policy]. Natsyonalnyi iurydycheskyi zhurnal: teoryia y praktyka. 2020. http://www.jurnaluljuridic.in.ua/archive/2020/1/19.pdf
Koziuk, V. V. “Hotovnist do zaprovadzhennia tsyfrovoi valiuty: chy ye vazhlyvoiu nezalezhnist tsentrobankiv?“ [Readiness for Digital Currency Adoption: Is Central Bank Independence Important?]. Finansy Ukrainy, no. 3 (2021): 7-22.
“Krishna Srinivasan. Opening Remarks at Peer-Learning Series on Digital Money/Technology: Central Bank Digital Currency and the Case of China“. IMF. https://www.imf.org/en/News/Articles/2022/07/07/sp070722-central-bank-digital-currency-and-the-case-of-china
Ree, J. “Five Observations on Nigeria's Central Bank Digital Currency“. IMF African Department. https://www.imf.org/en/News/Articles/2021/11/15/na111621-five-observations-on-nigerias-central-bank-digital-currency
Anthon, N. “Nigeria Restricts Cash to Push Central Bank Digital Currency“. Cato Institute. https://www.cato.org/blog/central-bank-digital-currency-war-cash
“Tradingeconomics“. https://tradingeconomics.com/nigeria/inflation-cpi
“Nigeria eyes unbanked to boost enaira as uptake languishes“. Bloomberg. https://www.businesslive.co.za/bloomberg/news/2022-08-18-nigeria-eyes-unbanked-to-boost-enaira-as-uptake-languishes/
Central bank of Nigeria. https://www.cbn.gov.ng/documents/publications.asp
“Nigeria's naira shortage: Anger and chaos outside banks“. BBC. https://www.bbc.com/news/world-africa-64626127
Central Bank of Nigeria. https://www.cbn.gov.ng/Out/2022/CCD/RevisedCashWithdrawal.pdf
Chaudhuri, R. et al. “Sustaining digital payments growth: Winning models in emerging markets“. Mckinsey. https://www.mckinsey.com/industries/financial-services/our-insights/sustaining-digital-payments-growth-winning-models-in-emerging-markets
England, J. “Almost 50% of UK's SMBs say cash is essential, report says“. Fintechmagazine. https://fintechmagazine.com/digital-payments/almost-50-of-uks-smbs-say-cash-is-essential-report-says
“Study on the payment attitudes of consumers in the euro area“. ECB. https://www.ecb.europa.eu/stats/ecb_surveys/space/html/index.en.html
“Digital euro“. ECB. https://www.ecb.europa.eu/paym/digital_euro/html/index.en.html
“The digital euro and the evolution of the financial system. Introductory statement by Fabio Panetta, Member of the Executive Board of the ECB, at the Committee on Economic and Monetary Affairs of the European Parliament. Brussels, 15 June 2022“. ECB. https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220615~0b859eb8bc.en.html
“Natsionalnyi bank predstavyv uchasnykam platizhnoho rynku ta rynku virtualnykh aktyviv proiekt kontseptsii e-hryvni“ [The National Bank Presented the E-hryvnia Concept Project to the Participants of the Payment Market and the Virtual Assets Market]. Natsionalnyi bank Ukrainy. https://bank.gov.ua/ua/news/all/natsionalniy-bank-predstaviv-uchasnikam-platijnogo-rinku-ta-rinku-virtualnih-aktiviv--proyekt-kontseptsiyi-e-grivni
“Zvit za rezultatamy konferentsii «Tsyfrovi valiuty tsentralnykh bankiv: novi mozhlyvosti dlia platezhiv»“ [Report on the Results of the Conference "Digital Currencies of Central Banks: New Opportunities for Payments"]. Natsionalnyi bank Ukrainy. https://bank.gov.ua/admin_uploads/article/final_CBDCinUA2020.pdf
French, D., Wang, E., and Alun, J. “SVB is largest bank failure since 2008 financial crisis“. Reuters. https://www.reuters.com/business/finance/global-markets-banks-wrapup-1-2023-03-10/
“Signature Bank Is Shut by Regulators After SVB Collapse“. The Wall Street Journal. https://www.wsj.com/articles/signature-bank-is-shut-by-regulators-after-svb-failure-a5f9e0f7