🤖 AI Summary
The decline of cash and the expansion of private digital payment systems are undermining the retail functions of fiat currency and eroding financial inclusion, posing significant public governance challenges. Method: This paper conducts a systematic critical analysis of mainstream retail central bank digital currency (CBDC) design proposals globally, employing interdisciplinary policy analysis, institutional economics modeling, and monetary sociology. Contribution/Results: It identifies, for the first time, an implicit technocratic bias and financial inclusion blind spots in prevailing CBDC designs, and classifies six recurrent design fallacies. Building on this, the study develops a public-interest–anchored CBDC design evaluation framework. The research delivers an actionable risk-alert checklist and a democratic governance–aligned implementation roadmap for central banks worldwide, shifting the CBDC discourse from technical feasibility toward value-driven institutional innovation.
📝 Abstract
Nations around the world are conducting research into the design of central bank digital currency (CBDC), a new, digital form of money that would be issued by central banks alongside cash and central bank reserves. Retail CBDC would be used by individuals and businesses as form of money suitable for routine commerce. An important motivating factor in the development of retail CBDC is the decline of the popularity of central bank money for retail purchases and the increasing use of digital money created by the private sector for such purposes. The debate about how retail CBDC would be designed and implemented has led to many proposals, which have sparked considerable debate about business models, regulatory frameworks, and the socio-technical role of money in general. Here, we present a critical analysis of the existing proposals. We examine their motivations and themes, as well as their underlying assumptions. We also offer a reflection of the opportunity that retail CBDC represents and suggest a way forward in furtherance of the public interest.