The International Monetary Fund (IMF) recently conducted a comprehensive survey of 19 countries in the Middle East and Central Asia, focusing on the adoption and potential benefits of central bank digital currencies (CBDCs). The findings, released on Tuesday, highlight the significant role that CBDCs could play in promoting financial inclusion and improving the efficiency of international remittances.
Advancing Stages of CBDC Development
Among the surveyed countries, many are currently in the research phase of CBDC exploration. Notably, Bahrain, Georgia, Saudi Arabia, and the United Arab Emirates have progressed to the more advanced “proof-of-concept” stage. Kazakhstan leads the pack with two successful pilot programs for its digital tenge, demonstrating the highest level of advancement in the region.
The Role of CBDCs in Financial Inclusion
The IMF survey emphasizes that CBDCs have the potential to foster competition in the payments market and simplify transaction settlements, which could lower the cost of financial services and make them more accessible to a broader population. The findings suggest that by reducing transaction costs and improving access, CBDCs could significantly enhance financial inclusion.
Addressing Risks and Challenges
However, the survey also identifies several risks associated with CBDCs that need to be addressed to ensure their benefits are fully realized. These risks include low levels of digital and financial literacy, lack of identification, distrust of financial institutions, and overall low wealth
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