Publication:
What Does Digital Money Mean for Emerging Market and Developing Economies?

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dc.contributor.authorWorld Bank
dc.contributor.authorBank for International Settlements
dc.date.accessioned2022-04-29T20:42:48Z
dc.date.available2022-04-29T20:42:48Z
dc.date.issued2022
dc.description.abstractPhysical cash and commercial bank money are dominant vehicles for retail payments around the world, including in emerging market and developing economies (EMDEs). Yet payments in EMDEs are marked by several key deficiencies, such as lack of universal access to transaction accounts, widespread informality, limited competition, and high costs, particularly for cross-border payments. Digital money seeks to address these deficiencies. This note categorizes new digital money proposals. These include crypto-assets, stable coins, and central bank digital currencies (CBDCs). It assesses the supply and demand factors that may determine in which countries these innovations are more likely to be adopted. It lays out particular policy challenges for authorities in EMDEs. Finally, it compares these with digital innovations such as mobile money, retail fast-payment systems, new products by incumbent financial institutions, and new entrants such as specialized cross-border money-transfer operators. Proposals for global stablecoins have put a much-needed spotlight on deficiencies in financial inclusion, and in cross-border payments and remittances in EMDEs. Yet stablecoin initiatives are no panacea. While they may achieve adoption in certain EMDEs, they may also pose development, macroeconomic, and cross-border challenges for these countries and have not been tested at scale. Several EMDE authorities are weighing the potential costs and benefits of CBDCs. We argue that the distinction between token-based and account-based money matters less than the distinction between central bank and non-central bank money. Fast-moving fintech innovations that are built on, or improve existing financial plumbing, may address many of the issues in EMDEs that both private stablecoins and CBDCs aim to tackle.en
dc.identifierhttp://documents.worldbank.org/curated/en/099736004212241389/P17300602cf6160aa094db0c3b4f5b072fc
dc.identifier.doi10.1596/37358
dc.identifier.urihttps://hdl.handle.net/10986/37358
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectACCESS TO TRANSACTION ACCOUNT
dc.subjectACCESS TO BANKING
dc.subjectCRYPTO-ASSETS
dc.subjectREMITTANCES
dc.subjectCENTRAL BANK DIGITAL CURRENCIES (CBDCS)
dc.subjectCRYPTO CURRENCY
dc.subjectTOKEN-BASED MONEY
dc.subjectACCOUNT-BASED MONEY
dc.subjectNON-CENTRAL BANK MONEY
dc.subjectPRIVATE STABLECOINS
dc.subjectDEVELOPING ECONOMY CURRENCY
dc.subjectDIGITAL TRANSFORMATION
dc.subjectEMERGING MARKET
dc.subjectDIGITAL MONEY
dc.titleWhat Does Digital Money Mean for Emerging Market and Developing Economies?en
dc.title.alternativeFintech and the Future of Finance Flagship Technical Noteen
dc.typeTechnical Note
dspace.entity.typePublication
okr.crossref.titleWhat Does Digital Money Mean for Emerging Market and Developing Economies?Fintech and the Future of Finance Flagship Technical Note
okr.date.disclosure2022-04-21
okr.date.doiregistration2025-05-07T09:14:28.872268Z
okr.date.lastmodified2022-04-21T00:00:00Zen
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099736004212241389/P17300602cf6160aa094db0c3b4f5b072fc
okr.guid099736004212241389
okr.identifier.externaldocumentum33792118
okr.identifier.internaldocumentum33792118
okr.identifier.report170794
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099736004212241389/pdf/P17300602cf6160aa094db0c3b4f5b072fc.pdfen
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.topicFinance and Financial Sector Development::E-Finance and E-Security
okr.topicFinance and Financial Sector Development::Financial Regulation & Supervision
okr.topicFinance and Financial Sector Development::Non Bank Financial Institutions
okr.unitEFI-FCI-Finance-GD (EFNDR)
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