Abstract
Money is also on the verge of another revolutionary transformation in its long history. The emergence of cryptocurrencies and stablecoins has laid a foundation for the next wave of metamorphosis in money. In response to private digital currencies, reserve banks are considering issuing digital versions of their fiat currencies labelled as Central bank digital currencies (CBDCs). It is vital to reveal the catalysts for global interest in sovereign digital currencies. The current research aims to identify and prioritise the motivations for launching central bank digital currencies in emerging markets. With the help of the literature survey and qualitative expert interviews, the study identified four major and 13 sub-categories of motivations. A fuzzy analytical hierarchal process was employed to determine the relative importance of these motivations and sub-motivations. The study’s outcomes revealed that payment-related motivations are the most significant motivations for launching government-backed digital currencies. In addition, encouraging financial inclusion and payment efficiencies dominate in sub-criterion.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Agur, I., Ari, A., Dell’Ariccia, G.: Designing central bank digital currencies. J. Monet. Econ. 125, 62–79 (2022a). https://doi.org/10.1016/j.jmoneco.2021.05.002
Agur, I., Ari, A., Dell’Ariccia, G.: Designing central bank digital currencies. J. Monet. Econ. 125, 62–79 (2022b). https://doi.org/10.1016/j.jmoneco.2021.05.002
Alzarrad, M.A., Moynihan, G., Hatamleh, M., Song, S.: “Fuzzy multi-criteria decision-making model for time-cost-risk trade-off optimisation in construction projects. Adv. Civ. Eng. , (2019). https://doi.org/10.1155/2019/7852301
Andolfatto, D.: Assessing the impact of Central Bank Digital Currency on private banks. Econ. J 131(634), 525–540 (2021). https://doi.org/10.1093/ej/ueaa073
Armelius - E-krona design models pros, cons and trade-offs.pdf. (n.d.). Retrieved January 23, et al.: from (2022). https://www.riksbank.se/globalassets/media/rapporter/pov/artiklar/engelska/2020/200618/2020_2-e-krona-design-models-pros-cons-and-trade-offs.pdf
Armelius, H., Guibourg, G., Johansson, S., Schmalholz, J.: E-krona design models: Pros, cons and trade-offs. Sveriges Riksbank Econ. Rev., 80–96. (2020)
Arora, A., Rani, N., Devi, C., Gupta, S.: Factors affecting consumer purchase intentions of organic food through fuzzy AHP. Int. J. Qual. Reliabil. Manag (2021). https://doi.org/10.1108/IJQRM-01-2021-0019
Auer, R., Frost, J., Gambacorta, L., Monnet, C., Rice, T., Shin, H.S.: Central Bank Digital Currencies: Motives, Economic Implications and the Research Frontier (SSRN Scholarly Paper ID 3922836). Social Science Research Network. (2021). https://doi.org/10.2139/ssrn.3922836
Auer, R., Haene, P., Holden, H.: Multi-CBDC arrangements and the future of cross-border payments. (2021). https://www.bis.org/publ/bppdf/bispap115.htm
Babu, S., Abraham, K.M.: Central bank digital currencies: policy and operational perspectives for India. CSI Trans. ICT. 9(2), 85–94 (2021). https://doi.org/10.1007/s40012-021-00327-6
Barontini, C., Holden, H.: Proceeding with caution—a survey on central bank digital currency. Bank for International Settlements (2019)
Barrdear, J., Kumhof, M.: The macroeconomics of central bank digital currencies. J. Econ. Dyn. Control. (2021). https://doi.org/10.1016/j.jedc.2021.104148
Bhowmik, D.: Monetary Policy Implications of Central Bank Digital Currency with Special Reference to India. Asia-Pacific J. Manag. Technol. (AJMT), 2(3): 3. (2022). https://ejournal.lincolnrpl.org/index.php/ajmt/article/view/53
Boar, C., Holden, H., Wadsworth, A.: Impending arrival—a sequel to the survey on central bank digital currency. (2020). https://www.bis.org/publ/bppdf/bispap107.htm
Botta, A., Digiacomo, N., Mole, K.: Monetising data: a new source of value in payments. Mckinsey. (2017). https://www.mckinsey.com/industries/financial-services/our-insights/monetizing-data-a-new-source-of-value-in-payments
Brunnermeier, M., James, H., Landau, J.-P.: The Digitalization of Money (No. w26300; p. w26300). National Bureau of Economic Research. (2019). https://doi.org/10.3386/w26300
Buckley, J.J.: Fuzzy hierarchical analysis. Fuzzy Sets Syst. 17(3), 233–247 (1985). https://doi.org/10.1016/0165-0114(85)90090-9
Buckley, J.J.: Fuzzy Probabilities. New Approach and Applications, p. 115. Springer, Berlin Heidelberg (2005)
BusinessToday. Alipay retains leadership position with 55% market share in China’s mobile payments market—BusinessToday. Https://Www.Businesstoday.Com.My/. (2020)., July 9 https://www.businesstoday.com.my/2020/07/09/alipay-retains-leadership-position-with-55-market-share-in-chinas-mobile-payments-market/
Central bank digital currencies: Foundational principles and core features. (2020). https://www.bis.org/publ/othp33.htm
Chorzempa, M.: China, the United States, and central bank digital currencies: how important is it to be first? China Econ. J. 14(1), 102–115 (2021). https://doi.org/10.1080/17538963.2020.1870278
Chowdhury, S., Roy, B.C.: Rating micro finance institutions operating in India: an application of fuzzy analytical hierarchical process (FAHP). Econ. Affairs 61(1), 107 (2016). https://doi.org/10.5958/0976-4666.2016.00015.2
Christodorescu, M., Gu, W.C., Kumaresan, R., Minaei, M., Ozdayi, M., Price, B., Raghuraman, S., Saad, M., Sheffield, C., Xu, M., Zamani, M.: Towards a two-tier hierarchical infrastructure: an offline payment system for Central Bank Digital Currencies. ArXiv:2012.08003 [Cs]. http://arxiv.org/abs/2012.08003 (2020)
Davoodalhosseini, S.M.: Central bank digital currency and monetary policy. J. Econ. Dyn. Control (2021). https://doi.org/10.1016/j.jedc.2021.104150
Deng, H.: Multicriteria analysis with fuzzy pairwise comparison. Int. J. Approx. Reason. 21(3), 215–231 (1999)
Dupuis, D., Gleason, K., Wang, Z.: Money laundering in a CBDC world: a game of cats and mice. J. Financ. Crime 29(1), 171–184 (2021). https://doi.org/10.1108/JFC-02-2021-0035
Fu, H., Ho, Y., Chen, R.C.Y., Chang, T., Chien, P.: Factors affecting the adoption of electronic marketplaces: a fuzzy AHP analysis. Int. J. Oper. Prod. Manage 26(12), 1301–1324 (2006). https://doi.org/10.1108/01443570610710560
Garg, P., Gupta, B., Chauhan, A.K., Sivarajah, U., Gupta, S., Modgil, S.: Measuring the perceived benefits of implementing blockchain technology in the banking sector. Technol. Forecast. Soc. Chang 163, 120407 (2021). https://doi.org/10.1016/j.techfore.2020.120407
Gupta, S., Gupta, S., Mathew, M., Sama, H.R.: Prioritising intentions behind investment in cryptocurrency: a fuzzy analytical framework. J. Econ. Stud. 48, 1442–1459 (2021). https://doi.org/10.1108/JES-06-2020-0285
He, D.: Monetary effects of global stablecoins. Cato. J. 41, 353–365 (2021). https://doi.org/10.36009/CJ.41.2.13
Kshetri, N.: The economics of Central Bank Digital currency [computing’s economics]. Computer 54(6), 53–58 (2021). https://doi.org/10.1109/MC.2021.3070091
Lam, B.: The Case for Multi-CBDC Arrangements. (2021). https://doi.org/10.13140/RG.2.2.33913.19043/1
Larue, L., Fontan, C., Sandberg, J.: The promises and perils of central bank digital currencies. Revue de La Régulation. Capitalisme, Institutions, Pouvoirs 28, 28 (2020). https://doi.org/10.4000/regulation.18018
Mahtani, U.S., Garg, C.P.: An analysis of key factors of financial distress in airline companies in India using fuzzy AHP framework. Transp. Res. Part A Policy Pract. 117, 87–102 (2018). https://doi.org/10.1016/j.tra.2018.08.016
Mitra, A., Majumdar, A., Ghosh, A., Majumdar, P.K., Banerjee, D.: Selection of handloom fabrics for summer clothing using multi-criteria decision-making techniques. J. Nat. Fibers. 12(1), 61–71 (2015)
Monroe, B., Basel, A.M.L.I.: 2021: An ounce of prevention worth a pound of effectiveness when it comes to countering criminals, championing compliance. CFCS | Association of Certified Financial Crime Specialists. (2021)., September 18 https://www.acfcs.org/basel-aml-index-2021-an-ounce-of-prevention-and-being-less-effective-on-effectiveness/
Nabilou, H.: Testing the waters of the Rubicon: the European Central Bank and central bank digital currencies. J. Bank. Regul 21(4), 299–314 (2020). https://doi.org/10.1057/s41261-019-00112-1
Náñez Alonso, S.L., Echarte Fernández, M., Bas, S., Kaczmarek, J.: Reasons fostering or discouraging the implementation of Central Bank-Backed digital currency: a review. Economies 8(2), 41 (2020). https://doi.org/10.3390/economies8020041
Náñez Alonso, S.L., Jorge-Vazquez, J., Reier Forradellas, R.F.: Central Banks Digital currency: detection of optimal countries for the implementation of a CBDC and the implication for payment industry open innovation. J. Open Innov. Technol. Market Complex 7(1), 72 (2021). https://doi.org/10.3390/joitmc7010072
Ouma, S.A., Odongo, T.M., Were, M.: Mobile financial services and financial inclusion: Is it a boon for savings mobilisation? Rev. Dev. Financ. 7(1), 29–35 (2017). https://doi.org/10.1016/j.rdf.2017.01.001
Ozili, P.K.: Can Central Bank digital currency increase financial inclusion? Arguments for and against (SSRN Scholarly Paper ID 3963041). Social Science Research Network. (2021). https://doi.org/10.2139/ssrn.3963041
Pieters, G.: Digital currencies and central banks. In: Rau, R., Wardrop, R., Zingales, L. (eds.) The Palgrave Handbook of Technological Finance, pp. 139–160. Springer, Cham (2021)
Prasad, E.S.: The Future of Money: How the Digital Revolution is Transforming Currencies and Finance. Belknap Press (2021)
Regulation: Supervision and Oversight of “Global Stablecoin” Arrangements, pp. 1–30. Financial Stability Board (2021)
Saaty, T.L.: The analytic hierarchy process: planning, priority setting, resource allocation. McGraw-Hill International Book Co (1980)
Saaty, T.L.: The Analytical Hierarchy Process: Planning, Priority Setting, Resource Allocation. McGraw-Hill, New York, NY (1980)
Shen, W., Hou, L.: China’s central bank digital currency and its impacts on monetary policy and payment competition: game changer or regulatory toolkit? Comput. Law Secur. Rev 41, 105577 (2021). https://doi.org/10.1016/j.clsr.2021.105577
Singh, S., Walia, N.: Momentum investing: a systematic literature review and bibliometric analysis. Manage. Rev. Q (2020). https://doi.org/10.1007/s11301-020-00205-6
Singh, S., Walia, N., Saravanan, S., Jain, P., Singh, A., Jain, J.: Mapping the scientific research on alternative momentum investing: a bibliometric analysis. J. Econ. Admin. Sci. (2021). https://doi.org/10.1108/JEAS-11-2020-0185
Yang, B., Sun, Y., Wang, S.: A novel two-stage approach for cryptocurrency analysis. Int. Rev. Financ. Anal 72, 101567 (2020). https://doi.org/10.1016/j.irfa.2020.101567
Zhang, T., Huang, Z.: Blockchain and central bank digital currency. ICT Exp. (2021). https://doi.org/10.1016/j.icte.2021.09.014
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendices
Appendix 1
-
1.
Express your opinions about CBDCs. Mention the major motivations behind introducing CBDCs in emerging markets. How various CBDC design options will facilitate these motivations?
-
2.
Why emerging nations seems more interested in CBDCs? Will these CBDCs will resolve the core macro-economic issues?
Appendix 2
-
1.
Express your opinions about CBDCs. What are the major CBDC projects? Mention the instrumental, incentive and ledger designs in these projects.
-
2.
State the macro-economic impacts of CBDCs?
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Singh, S., Gupta, S., Kaur, S. et al. The quest for CBDC: indentifying and prioritising the motivations for launching central bank digital currencies in emerging countries. Qual Quant 57, 4493–4508 (2023). https://doi.org/10.1007/s11135-022-01558-8
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11135-022-01558-8