The Opportunities and Limitations for Financial Inclusion


This presentation explores the opportunities and limitations of retail central bank digital currencies (CBDCs) in promoting financial inclusion. It highlights the causes of financial exclusion, the potential of CBDCs to address these challenges, and the necessary steps for regulators and policymakers to move forward.

Causes of Financial Exclusion

Financial exclusion is rooted in marginalization and various factors contribute to it. These include historical inequality, religious persecution, limited education on financial tools, and the inability of financial institutions to take on credit risks, especially in emerging markets. The widening economic inequality further exacerbates the risk of exclusion, with 1.7 billion people lacking access to a bank account and billions more lacking access to other financial services.

CBDCs as a Solution for Financial Inclusion

A central bank digital currency (CBDC) is a digital form of currency issued by a central bank. CBDCs can contribute to financial inclusion by providing a new payment system. There are two types of CBDCs: wholesale and retail. Retail CBDCs are designed for everyday use by individuals and are held in accounts directly with the central bank. Unlike traditional financial institutions, central banks can issue money directly to individuals without taking on credit risks.

Transforming the Payment System

CBDCs can transform the payment system by enabling secure, fast, and digital transactions. Unlike fiat cash, which can be expensive and challenging to distribute, CBDCs offer a more accessible and efficient method, particularly for rural areas and marginalized groups. CBDCs provide a common digital currency, allowing for an interoperable system and integration of various payment providers, such as fintech companies.

Financial History and Digital Identities

CBDCs incentivize governments to create digital identities for historically excluded individuals and integrate these identities with financial products. They help overcome the “chicken and egg” problem of requiring credit history for financial access by providing an inclusive entry point. Additionally, CBDCs encourage the development of shared data standards for other government services, promoting a more digital and inclusive ecosystem.

Reshaping the Relationship Between Central Banks and People

CBDCs reshape the relationship between central banks and individuals, offering more direct and targeted interventions. They enable governments to implement stimulus programs, cash transfers, and automatic rebates efficiently. CBDCs also facilitate mobile and online payments, reducing reliance on in-person transactions. Furthermore, CBDCs support innovation by fostering the development of new financial products within this digital ecosystem.

Limitations and the Need for Broader Social Transformation

While CBDCs have the potential to enhance financial inclusion, they cannot address the underlying causes of exclusion, such as lack of wealth and systemic inequalities. CBDCs should be seen as a technocratic solution, and broader social transformations are necessary to tackle these issues. This requires addressing corruption, social inequality, housing policies, religious persecution, and other factors contributing to exclusion.

A National Right for CBDC Accounts

To ensure an inclusive financial system, a national right for CBDC accounts is crucial. This right defines an aspiration and provides a framework for achieving an inclusive financial ecosystem. Although the enforcement of such rights may vary, establishing this precedent allows for social movements, legislative actions, and legal processes to advocate for financial inclusion.


CBDCs have the potential to contribute to financial inclusion by creating a digital ecosystem and reshaping the relationship between central banks and individuals. However, further research, regulatory work, and private sector involvement are necessary to fully address financial exclusion. Elevating the voices of excluded individuals is paramount, and the design mechanisms, testing in closed networks, and the development of comprehensive frameworks should prioritize their perspectives and needs.