Leveraging CBDCs for Promoting Financial Inclusion

Fiw Topic

Inclusive Digital Economies

Fiw Year

2024

Transcripts:

English

Spanish

French

Summary + Key Insights

The panel discusses leveraging Central Bank Digital Currencies (CBDCs) to enhance financial inclusion, addressing challenges, implementation strategies, and real-world examples.

🌍 Global Financial Inclusion: Financial inclusion remains a critical goal for central banks, as it fosters economic stability and growth. CBDCs present a unique opportunity to expand access to financial services for the underbanked and unbanked populations, addressing the persistent gaps in financial systems.

💡 CBDCs as Access Tools: CBDCs can serve as a digital gateway for unbanked individuals to enter the financial system, offering services like payments and savings, thereby promoting broader economic participation and reducing poverty.

🔒 Building Trust: For CBDCs to be effective, central banks must maintain public trust. Transparency in operations, consistent communication about goals, and effective risk management frameworks are essential to foster confidence in these new digital currencies.

📈 Stakeholder Engagement: Successful CBDC implementation requires collaboration among various stakeholders, including governments, financial institutions, and the public. Engaging these parties early in the design process ensures that the CBDC meets diverse needs and encourages widespread adoption.

🔄 Adaptive Strategies: The ability to pivot and adapt to the evolving needs of users is crucial for the success of CBDCs. Central banks must be ready to innovate and refine their approaches based on real-world feedback and changing conditions.

📊 Privacy and Security Concerns: As CBDCs involve sensitive data, it is critical to incorporate robust privacy protections and security measures in their design. Balancing user privacy with regulatory compliance is essential to prevent misuse while ensuring user trust.

🤝 Research and Evidence: Ongoing research and data collection will help central banks understand the impacts of CBDCs. Learning from pilot programs and real-world implementations will provide valuable insights for refining strategies and enhancing financial inclusion efforts.

This session summary was AI-generated using NoteGPT.

Financial inclusion is a key objective of many central banks. Central Bank Digital Currency (CBDC) offers an entry into the broader financial system for those marginalized by the current system. CBDCs offer a risk-free and widely acceptable form of digital money, which can be used for offline payments, with potentially lower costs and greater accessibility. Emerging markets and lower-income countries stand to gain from this innovative payment method. In the Caribbean, countries such as Barbados, the Bahamas, and Jamaica are using CBDCs as a way of meeting Anti-Money Laundering/Combating the Financing of Terrorism standards.

Session Speakers

Babak Abbaszadeh

President and CEO, Toronto Centre

Babak Abbaszadeh joined Toronto Centre for Global Leadership in Financial Supervision as President and CEO in June 2010. Babak is responsible for the organization’s business strategy, capacity building programming, operational activities, and outreach. Babak also oversees the Centre’s collaboration with central banks, supervisory authorities, international development agencies, Financial Stability Board (FSB), international standard setting bodies, international financial institutions, and regional development banks. He has 29 years of experience in public policy and implementation in the public and private sectors. Babak has held leadership roles in highly regulated sectors such as financial services, energy, and natural resources financing including at Sun Life Financial, and the Canada Pension Plan Investment Board (CPPIB). He was also a former chief of staff to Cabinet Ministers in Canada.

Natalie Haynes

Deputy Governor, Bank of Jamaica

Mrs. Natalie Nadine Haynes is the Deputy Governor of the Central Bank of Jamaica. She has devoted her career to central banking and has served the Bank of Jamaica and the Jamaican people for over 35 years. Born in St. Catherine, Jamaica Mrs. Haynes is an authentic ‘daughter of the soil’. She was educated in Jamaica at the University of the West Indies Mona, where she obtained a BSc degree in Economics and History (Honours) which she received in 1985 and a Masters degree in Economics, which she received in 1988. In 1987, just before the completion of her post-graduate studies, Mrs. Haynes began her career of public service with the Bank of Jamaica where she was assigned to the Economic Policy & Programming Department. She was soon recognized for her strong technical and analytical skills, and by 1996 had risen through the ranks to middle management as the Executive Assistant to the then Governor. Mrs. Haynes’ journey into the operational aspects of the Bank which originally began in 1994, continued in 1998, when she was promoted to Director, Foreign Exchange Budgeting and Market Operations and Analysis Departments in the then Banking & Market Operations Division. She would eventually go on to head the Banking & Market Operations Division in 2005 when she was promoted to Division Chief, a position she held for almost 14 years. In 2019, Mrs. Haynes was appointed to the Executive Management of the Bank as Deputy Governor with responsibility for the Banking & Currency Operations and Financial Markets Infrastructure Divisions. She currently leads a dynamic team of over 100 staff members, spanning six departments. Throughout her career at the Bank of Jamaica, Mrs. Haynes has spearheaded growth and innovation in the areas for which she has responsibility that have fostered the development of the local financial market. She was a critical part of the team for the implementation of the JamClear® Real Time Gross Settlement System and the JamClear® Central Securities Depository. More recently, she was responsible for the implementation of the JamClear® Foreign Exchange Trading Platform. These financial markets infrastructures have not only served to modernize the financial system in Jamaica but also promoted development by ensuring transparency and price discovery. As Chairman of the Bank’s Oversight Committee for the implementation of a Central Bank Digital Currency (CBDC), Mrs. Haynes is leading the charge for this major fintech innovation by the Bank. During her years of service to the Bank, Mrs. Haynes has held several leadership positions on various committees, including serving as Chairman of the Bank of Jamaica Credit Committee and the Bank of Jamaica Asset Disposal Committee. She has also served as a member of the Board of the PetroCaribe Development Fund, and Chairman of the Board of Unity of Jamaica Church and currently serves as Chairman of Retail Payments of Jamaica and the National Payments Council. She has represented Bank of Jamaica at international conferences and as a member of several international committees including the Caricom Fintech Working Group, Center for Latin American Monetary Studies (CEMLA) Forum on Fintech Data Gaps, Western Hemisphere Payments and Security Settlement Forum and the World Bank Expert Group on Faster Payments.

Dong He

Deputy Director, Monetary and Capital Markets Department, International Monetary Fund (IMF)

He Dong is Deputy Director of the Monetary and Capital Markets Department (MCM) of the International Monetary Fund. Prior to re-joining the IMF in October 2014, he was Executive Director at the Hong Kong Monetary Authority, responsible for directing research and policy advice on issues relating to the maintenance of monetary and financial stability and the development of financial markets. He was also Director of the Hong Kong Institute for Monetary Research. He started his career in 1993 when he joined the World Bank through the Young Professionals Program and was a staff member of the IMF from 1998 to 2004. Dr. He holds a doctorate in economics from the University of Cambridge. He has published extensively on macroeconomic and financial market issues. His current research interests include the interactions between monetary policy and financial regulation, and digitization of money and finance.

Haocong Ren

Lead – Policy and Investment, CGAP

Haocong is a lead financial sector specialist and pillar lead of CGAP’s policy and investment team. Prior to joining CGAP, she spent almost 20 years at the World Bank (WB). She was a senior financial sector specialist in the Finance, Competitiveness and Innovation (FCI) team in the Europe and Central Asia Region of the World Bank from 2021 to 2024. She led/co-led the financial sector work programs for Azerbaijan and Georgia, and coordinates FCI’s work programs across the South Caucasus. Before that, she worked in the Middle East and North Africa Region of the WB, led the financial sector work program in Lebanon from 2019 to 2021 including during the onset and early stages of the financial crisis, leading the policy dialogue with the government and Banque du Liban. She also worked on various financial sector issues in several other countries in the region (Egypt, Iraq, Jordan, Kuwait, and West Bank and Gaza). Prior to joining the regional team in 2017, she worked in the global team responsible for financial stability and integrity issues within the FCI Global Practice of the WB. She helped coordinate the WB engagement with the Financial Stability Board on financial regulatory reforms, leveraging WB’s global engagements with various standard-setting bodies. She also worked extensively on financial sector issues in China from 2009 to 2017. She participated in several Financial Sector Assessment Programs, including as WB deputy mission chief for the China FSAP Update 2017 and Kuwait FSAP Update 2018, and as WB mission chief for the Georgia FSAP Update 2021. Her work has covered a range of topics, including financial regulatory reforms, state-owned financial institutions, crisis management, supervisory governance and structure, SME finance, digital financial services, climate and green agenda, and capital market development, etc. During 2005-2008, Haocong worked in the International Finance Team of the WB’s Economic Prospects Group and was a member of the core team on a World Bank flagship publication Global Development Finance. Haocong received a Bachelor’s Degree in Economics from Peking University (China) and an M.Phil. Degree in Economics from the George Washington University. She is a CFA charterholder.

Jon Frost

Head of Economics, Americas at the Bank for International Settlements (BIS)

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