• The Digital Currency Initiative (DCI) of the Massachusetts Institute of Technology (MIT) has released a report on the inclusivity of the retail central bank digital currency (CBDC) design.
• The study was conducted in four low- and middle-income nations: Nigeria, India, Indonesia, and Mexico.
• The report highlighted potential risks associated with the replication of harms of existing forms of payments by digital currency.

A group of researchers from the Digital Currency Initiative (DCI) of the Massachusetts Institute of Technology (MIT) have recently published a detailed report regarding the inclusivity of the retail central bank digital currency (CBDC) design. This research was conducted over a period of 15 months in four low- and middle-income nations: Nigeria, India, Indonesia, and Mexico.

The research considerations included existing financial infrastructure, CBDC design options, and user experience. In addition, the study explicitly emphasized differences between intermediated and non-intermediated (cash) forms of payments. These differences were established by comparing five accordances (what a user can do with technology) in intermediate and non-intermediate systems. Other comparison areas were the actual world application of the two systems and the challenges they posed for at-risk users.

Given that all the six CBDC pilots and projects running today use intermediated design models, the group arrived at several points of CBDC weaknesses. One issue raised by the report is the replication of harms of existing forms of payments by digital currency. The authors emphasized that there is a potential risk of intermediated CBDC making a replica design of the existing intermediated forms of payment. Therefore, being of the identical make-up, CBDC will inherit the problems.

To address this, the authors suggested that CBDC designs should be tailored to the local context of each nation, taking into account their existing financial infrastructure and user experience. This could help to ensure that CBDCs are accessible to everyone, regardless of their income level or access to technology. The report also highlighted the need for further research on the potential risks associated with the use of CBDC in different nations.

Overall, the report provides a comprehensive overview of the inclusivity of CBDC designs in four low- and middle-income nations. It serves as a valuable resource for policy makers and researchers looking to understand the potential risks associated with CBDCs, as well as the steps that can be taken to ensure their accessibility to all.

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