Can central bank digital currencies help tackle poverty?
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Governments worldwide have growing interest in the possibilities of central bank-issued digital money (central bank digital currencies – CBDCs).
CBDCs are live in a growing number of territories. For example, the Bahamas launched its ‘Sand Dollar’ in 2020; and, during 2021, Eastern Caribbean nations began to roll out ‘DCash’; and Nigeria, Africa’s most populous country, launched its ‘eNaira’. Meanwhile China is well progressed with its rollout of the e-CNY or digital yuan. Other major authorities and jurisdictions, for example the European Central Bank (for a potential eurozone digital euro), the US Federal Reserve (for a potential digital dollar) and the Bank of England (digital pound) are treading more cautiously: investigating, consulting and, in an increasing number of cases, experimenting – but yet to commit to full issuance.
Financial inclusion is one motivation to issue a CBDC. But this reason is typically given significantly greater prominence in developing countries with large unbanked populations. In contrast, in advanced economies interest appears driven mainly by payments efficiency and financial stability considerations. Nonetheless, financial inclusion is a major challenge for all governments, as is recognised in most authorities’ CBDC pronouncements: for example, the Bank of England’s five ‘core principles’ for CBDC include that financial inclusion should be a prominent consideration in a potential digital pound’s design.
This Global Government Fintech webinar sought to ask questions including:
- How can CBDCs help authorities to help with financial inclusion?
- What challenges do authorities face in designing and using a CBDC to help with financial inclusion?
- What advantages and disadvantages do CBDCs offer compared to other government payment disbursement tools, such as cash and pre-paid cards (and why)?
- How important are CBDC design technology choices to realising the potential benefits?
#CBDCsVsPoverty
Panel
Sharmyn Powell, Chief Risk Officer, Office of Corporate Strategy and Risk Management Chairperson, Fintech Working Group, Eastern Caribbean Central Bank
Ms Sharmyn Powell has been employed at the Eastern Caribbean Central Bank for over 26 years and currently holds the position of Chief Risk Officer. She leads the Office of Corporate Strategy and Risk Management with responsibility for Enterprise Risk Management, Compliance, Strategic Plan development and monitoring and Business Continuity Management.
Prior to assuming this role, she served in various capacities at the Bank including, Deputy Director, Accounting Department, Director, Currency Management Department and Director, Support Services Management Department. She is the Chairperson of the Bank’s Fintech Working Group, which is leading the implementation of the DCash Pilot Project for the issuance of a block-chain based digital version of the EC Currency. Ms Powell is a Certified Accountant (ACCA), and also carries the designations of Chartered Director (C. Dir) and Audit Committee Certified (A.C.C).
Scott Hendry, Senior Special Director, Bank of Canada
Scott Hendry was appointed Senior Special Director of Financial Technology (FinTech) in the Banking and Payments Department of the Bank of Canada in June 2016. In this role, he oversees the Bank’s efforts to monitor and research developments and implications of new technologies affecting the financial sector. This includes serving as the business lead on the Bank’s central bank digital currency research program. He previously held the role of Director of Research in the Funds Management and Banking Department and, before that, for the Financial Markets Department.
Mr. Hendry’s personal research has focused on central bank digital currency, electronic money, price discovery in the Canadian government bond market, and central bank communication. He has a BA in Economics from Wilfrid Laurier University and MA and Ph.D. in Economics from the University of Western Ontario.
Kimwood Mott, Project Manager, Digital Currency Implementation, Central Bank of The Bahamas
Mr. Mott has spent over 20 years in the banking and finance industry in both the retail and private banking sectors. He has an extensive background and experience in banking, information technology, and project management. As the project manager for digital currency implementation, Mr. Mott is tasked with improving the domestic digital payments space and driving the national adoption of the Sand Dollar digital currency. In addition to a wealth of knowledge and skills, Mr. Mott brings a unique perspective to the Sand Dollar project. As a small business owner, he recognizes the difficulties of our financial landscape and sees the potential and benefits of the Sand Dollar digital currency.
Webinar chair: Ian Hall, Editor, Global Government Fintech
Ian is editor of Global Government Fintech and also writes for media including City AM and #DisruptionBanking. He is former UK director for the pan-European media network Euractiv (2011-2018), editor of Public Affairs News (2007-2011) and news editor of PR Week (2000-2007). He was shortlisted for ‘Editor of the Year’ at the British Society of Magazine Editors (BSME) Awards in 2010. He began his career in Bulgaria at English-language weekly the Sofia Echo, with his year in the Balkans (1998-1999) sandwiched between a BA in Economics and MA in Urban & Regional Change in Europe (both from Durham University).
