CBDCs offer benefits such as improved financial inclusion, reduced transaction costs, and enhanced security. In addition to those who owed military service for the lands they had, there were also professional soldiers who fought for the Carolingians. If the holder of a certain amount of land was ineligible for military service (women, old men, sickly men or cowards) they would still owe military service. Institutions, such as monasteries or churches were also required to send soldiers to fight based on the wealth and the amount of lands they held. In fact, the use of ecclesiastical institutions for their resources for the military was a tradition that the Carolingians continued and greatly benefitted from. The next wave of chapters will likely cover financial stability, comparison with other payment innovations, and end-user adoption among other topics.
Do central banks need a CBDC when already equipped with other well-established digital payments systems? This chapter compares retail CBDC with fast payment systems and e-money, and explores how to prioritize development work if resources are constrained. If well designed, regulated, and complemented by an active developer community, all three systems could meet central bank objectives such as payments efficiency and financial inclusion. In an increasingly digitalized economy, that feature may be important to underpin the fungibility of money and trust in the financial system. It is possible to envisage the coexistence of fast payment systems, e-money, and CBDC in many payment landscapes across the world.
The threshold for the information disclosure rule may impact tax evasion issues, and a lower limit for user anonymity may improve tax collection and increase the fiscal base for the countries (United Nations, 2022). During the last decades, several countries have been interested in studying and developing CBDC for the retail or wholesale market. Nowadays, only four countries have already implemented the new technology for payment services, while the majority of the projects are still in progress. One of the key issues offered by CBDC is to construct a system that may also work offline and without power for people who live in remote places or where natural disasters frequently occur (IMF, 2022b). The development of offline solutions is mostly requested by developing countries or underdeveloped areas in developed countries.
They have a bank account and do not have access to financial services, and CBDC could be a solution for improving financial inclusion (Congressional Research Service, 2022). Cryptocurrencies may be readily offered to unbanked or underbanked citizens with lower costs for standard financial services. In only 6% of cases, the project aims to develop a CBDC that could be used for retail and wholesale payments. Implementing an official digital currency would significantly diminish currency management expenses while facilitating instantaneous transactions devoid of inter-bank settlements. India’s relatively elevated currency-to-GDP ratio presents an additional advantage of Central Bank Digital Currency (CBDC) adoption.
A detailed analysis of the primary motivation for using CBDC is presented, starting from the BIS survey results by distinguishing the retail and wholesale sectors and the developed and developing economies (Section 3). The last section summarizes the main results and discusses the open issues for developing the central currency created on the Digital Ledger Technology and blockchain solutions. India has introduced the e-Rupee, a form of digital currency, through the Reserve Bank of India (RBI).
Unlike decentralized cryptocurrencies, CBDCs are centralized and fully controlled by the government, offering a state-backed alternative to physical cash. CBDCs can be used for a variety of purposes, including daily transactions, cross-border payments, and enhancing financial inclusion while providing a more secure and efficient form of digital money. Central Bank Digital Currencies (CBDCs) represent a digital version of a country’s fiat currency, issued and regulated by central banks. These digital currencies aim to modernize financial systems, increase financial inclusion, and improve payment efficiency, offering a government-backed option for everyday transactions. Because of the benefits afforded by a central bank digital currency, policymakers at central banks estimate that at least one consumer-ready CBDC will launch within the next five years, according to a new study from IBM and OMFIF, an independent think tank. These people, who often live in developing economies where the transfer cost of remittances is often the highest, stand to benefit the most from financial institutions issuing central bank digital currencies secured by blockchain technology.
Unlike other cryptocurrencies, CBDC can be converted at par to banknotes like stablecoins and all the other more traditional payment solutions. The new payment solution is electronic, and it can be universally or locally recognized on the basis of the protocol adopted by the supervisory authority. Based on the Central Bank’s choices, the CBDC can be constructed with an account model that offers interest on deposits or as a token model that works like cash, cryptocurrencies, and stablecoins (UK Finance and EY, 2021). IAS Medha Anand, has get 310 marks in her optional subject sociology, 156 in paper – 1 & 154 marks in Paper-2 in CSE 2023. Notably, Sociology for UPSC has garnered a reputation as one of the Highest scoring optional subjects in the UPSC Main Examination, with numerous candidates consistently achieving 300+. Its popularity is evident in the fact that a significant proportion of top 100 rankers opt for Sociology as their optional subject, showcasing its high scoring potential, particularly for those not from sociology backgrounds.
