Central Bank Digital Currencies (CBDCs) and Financial Inclusion: Explore How CBDCs Can Promote Financial Inclusion for Unbanked or Underbanked Populations, Considering both Benefits and Challenges

Abstract

Central Bank Digital Currencies (CBDCs) offer a promising solution to expand financial inclusion for the unbanked and underbanked populations globally. This paper explores the potential benefits of CBDCs in promoting financial access, including reduced transaction costs, increased accessibility in remote areas, and efficient government transfers. However, challenges like infrastructure limitations, privacy concerns, and regulatory frameworks need to be addressed for successful implementation. The paper examines ongoing pilot projects in Sweden and China, highlighting how these initiatives tailor CBDCs to specific national contexts. By overcoming these challenges and continuing research, CBDCs can become a powerful tool for financial inclusion, fostering economic empowerment and participation.