Central Bank Digital Currencies and Financial Inclusion in Developing Economies

Abstract

Over 130 countries representing 98% of global GDP are currently exploring Central Bank Digital Currencies (CBDCs), with retail CBDCs aimed at households representing the most transformative potential for financial inclusion. For the estimated 1.4 billion unbanked adults globally, a well-designed retail CBDC could provide meaningful access to payment services, savings, and government transfers without requiring a commercial bank account. However, the financial inclusion potential depends critically on design choices regarding digital literacy requirements, offline functionality, smartphone dependence, and distribution models. This paper examines retail CBDC design across four dimensions using evidence from the Bahamas (Sand Dollar), Nigeria (eNaira), Jamaica (Jam-Dex), and China (digital yuan) as country cases.