Central bank digital currency, banking stability, and the macroeconomy: A dynamic stochastic general equilibrium analysis

Synergistic impact of the green economy and financial technologies on environmental sustainability in the United States

This paper proposes a CBDC design trilemma, the claim that central banks cannot simultaneously maximize privacy, financial stability, and regulatory compliance when designing retail central bank digital currencies and finds the existing literature consistent with this proposition. Through a systematic review of 140 peer-reviewed articles (Web of Science SCIE/SSCI indexes, 2014–2026, supplemented by Scopus and SSRN), evidence is synthesized across four thematic dimensions: design frameworks and architecture, financial stability and banking risk, privacy and security trade-offs, and user adoption and institutional quality. Cross-tabulation of coded data supports all three pairwise tensions: privacy-enhancing designs weaken AML/CFT enforcement, anonymous holdings amplify bank-run risk, and stringent prudential safeguards constrain transaction monitoring. The literature converges on two-tier, hybrid architectures with tiered privacy as the dominant compromise a “zone of feasible design”, that sacrifices full optimality on each vertex. Nine research gaps are identified, most critically the scarcity of empirical evidence from live deployments, the neglect of wholesale CBDC, and insufficient analysis of cross-border interoperability. The framework offers policymakers a structured lens for evaluating retail CBDC design trade-offs and researchers a testable proposition for future empirical work.

In April 2026, the Government of the Russian Federation submitted to the State Duma a comprehensive draft law on digital currency and digital rights, fundamentally reshaping the architecture of the Russian digital financial assets (DFA) market. This paper examines the financial market implications of the new regulation, including changes in market structure and competitive environment, shifts in liquidity and pricing parameters, the investment potential of the emerging secondary market, and the role of digital assets in cross–border settlements under sanctions pressure. The study demonstrates that the new regulatory framework is likely to lead to an oligopolistic market structure with high barriers to entry, while simultaneously creating conditions for qualitative growth in market depth through the legalization of organized trading and the introduction of a digital depository institution. Particular attention is given to the cross–border dimension, with an analysis of the «controlled gateway» model as a financial mechanism for settlements under sanctions–related constraints affecting traditional correspondent banking infrastructure.

Digital currency as a “watchdog”: Central bank digital currency and corporate misconduct

• Provides a case study of China’s E-CNY, a central bank digital currency project led by the People’s Bank of China. • Analyses the development of the E-CNY as an instance of state capitalism in China. • Advances a framework for understanding state capitalism in the context of monetary production and payments. • Argues that the E-CNY features the hierarchical re-layering of the public–private institutions and infrastructures in China. • Shows how the E-CNY favours state-owned banks and puts private BigTech payment platforms in the service of the state. In human geography and political economy research, the recent proliferation of central bank digital currencies (CBDCs) is explained as the re-establishment of state power and authority in response to the digitalization of money and payments by private firms. Focusing on the most advanced CBDC project to date – China’s E-CNY – this paper builds on the limited work to date that has identified the importance of central banks to new state capitalism and does this by foregrounding payments and the rise of CBDCs. This paper combining and developing two literatures: recent work on state capitalism that foregrounds the economic roles of state institutions, especially in the contemporary period of geo-economic and technological competition; and longer-standing research that stresses the public–private hybridity of monetary production and payment systems. It is argued that while CBDCs are an instance of the new state capitalism to some extent, the E-CNY case demonstrates how distributed and relational state actions feature multiple institutions of different kinds. Given extant monetary production and digital payment infrastructures in China, the E-CNY project entails a distinctive institutional hybridity. To reposition itself in the ‘re-layered’ payment infrastructures of the E-CNY, the People’s Bank of China (PBOC) has reasserted the importance of state-owned banks (SoBs) within these infrastructures and redefined the roles of private banks and the leading BigTech firms which dominate the intermediation of digital payments.

Abstract A hardware-bound key management architecture is developed, which is used in digital currency system with controlled access, verifiable node identity and high reliability encryption protection. Firstly, random input generation, polynomial coefficient construction, share encapsulation and commitment verification are all limited within the isolated execution boundary of hardware security module, thus separating the key generation path from the untrusted host environment. Secondly, the distributed key generation (DKG) mechanism is combined with the threshold signature workflow of DKG aggregation based on flexible turn optimization Schnorr threshold, allowing multiple nodes to complete collaborative signature without exposing local key shares. Through layered communication, controlled state evolution and certified standby node taking over, life cycle synchronization, multi-area recovery and disaster recovery switching are realized, thus ensuring the continuity of the system under node failure and regional failure. The results show that the average entropy reaches 0.99795 bit/bit under the condition of 16 nodes and 40 independent experiments for each node, while the test pass rate according to National Institute of Standards and Technology (NIST) Special Publication (SP) 800-22 remains at 96.4%. In the case of 30% malicious coefficient injection, the hardware-bound DKG structure still maintains the verification pass rate of 89.1%. When the proportion of abnormal nodes rose to 40%, the completion rate of DKG remained at 94.1%. The blocking rates of share substitution attack and offset injection attack reach 98.7% and 97.4% respectively. In the performance evaluation, the elliptic curve cryptography operation is accelerated by 3.8 times to 4.5 times with the assistance of hardware security module, and the number of transactions per second can reach 1165 under high load conditions. The proposed architecture enhances the execution integrity, key isolation and operation continuity of multi-node digital currency infrastructure. This design provides a reproducible and fault-tolerant security path for trusted digital currency deployment.

With the development of Internet finance, the original method of financial asset value assessment has been challenged, on this basis based on the application of blockchain technology and machine intelligence models, which provides new ideas for the innovation of the financial market. In this study, a set of data analysis models combining deep neural networks and blockchain are designed as a method for financial product valuation, in which a multilayer perceptron is used to realize the operation for high-dimensional input vectors, in addition to the combination of LSTM-Adaptive Attention model for the value assessment of digital financial products. The above model is empirically tested using large-sample, cross-market data, and a variety of digital currencies such as bitcoin, ethereum, and decentralized financial protocol tokens are selected for comparative study, which statistically significantly proves that the method has a high degree of accuracy and effectively manages risks. In summary, the model proposed in this paper can better capture the value characteristics embedded in digital currencies, improve the effectiveness and reliability of risk control while enhancing the accuracy of price prediction, and provide a powerful support for the healthy development of the financial market of the digital economy as well as the prevention and control of systemic risks.

This paper analyzes the evolution of Brazil's Drex, its official digital currency project. Initially conceived as a blockchain-based CBDC, the project was reportedly suspended in its original form by 2025. Media reports indicate it abandoned DLT to become a tokenization ecosystem, with an official stating it is “not a CBDC”. This article argues the transition highlights the fundamental tension between technological innovation and monetary sovereignty. We argue this shift prioritized hierarchical state control and situate Drex as a “third way” between centralized surveillance and private innovation. Drex's unfinished legacy provides crucial insights into the institutional future of money.

Abstract This article examines the introduction of Jamaica’s central bank digital currency (CBDC), Jamaica Digital Exchange (JAM-DEX), to show how monetary innovation is embedded in questions of sovereignty, class, race, and religion. Drawing on 23 months of ethnographic fieldwork in Kingston (2022–2024), it adopts a pragmatist anthropology of money and mobilizes three cultural lenses – institutional, infrastructural, and affective – to analyze how CBDCs are lived, interpreted, and contested in everyday life. The institutional lens reveals a struggle over monetary sovereignty that is continually undermined by the CBDC’s dependence on private, largely foreign-owned financial intermediaries for its circulation. The infrastructural lens shows how financial innovation can reproduce the racialized and classed hierarchies rooted in Jamaica’s colonial banking history. The affective lens shows how moral imaginaries, ranging from eschatological fears of the ‘Mark of the Beast’ to crypto-libertarian critiques of surveillance, shape public engagement with the CBDC. The article employs the metaphor of haunting to show how unresolved histories of racial capitalism re-emerge through JAM-DEX, producing a disjointed temporality in which digital futures arrive prematurely. The persistence of these financial ghosts reinforces the claim that CBDCs should be studied within their social, historical, and affective contexts.

Subject. This article discusses the comparative analysis of central bank digital currencies of different countries. Objectives. The study aims to examine the theoretical foundations of central bank digital currencies, their features, advantages, and potential risks. It also aims to compare implementation approaches of such digital currencies in different countries, and analyze their technological aspects of implementation. Methods. For the study, I used the methods of analysis and synthesis. Results. The article examines advantages and potential risks of central bank digital currencies. It also analyzes approaches to the central bank digital currencies implementation in different countries, including China, Sweden, the Bahamas, and Nigeria. Conclusions. A careful approach is necessary when choosing a central bank digital currency model, taking into account the specifics of the national economy and financial system of each country. The article proposes a hybrid approach to building a digital currencies international settlement system for Russia.

ABSTRACT This study investigates the mechanisms and heterogeneous impacts of Central Bank Digital Currency (CBDC) on the systemic risk of commercial banks. Utilizing panel data from 42 listed commercial banks in China over the period 2011–2023, we construct bank-level systemic risk metrics – Marginal Expected Shortfall (MES) and ΔCoVaR – based on stock return data. The development of CBDC is proxied by a monetary structure reshaping index and a CBDC conversion index. Employing fixed-effects regression, supplemented by mediation and heterogeneity analyses, we obtain three key findings: (1) CBDC increases the systemic risk of commercial banks by influencing their interest income and liquidity ratio. When control variables are excluded, each unit increase in the monetary structure reshaping effect is associated with an approximate 0.1-unit increase in the systemic risk of commercial banks. This conclusion remains robust to endogeneity tests and sensitivity analyses.; (2) The aforementioned effect is more pronounced for small and medium-sized banks, those with simpler income structures, and those with lower asset quality; (3) Macroprudential policies can effectively mitigate the impact of CBDC on systemic risk.

This study examined the influence of awareness, digital financial literacy, adequate digital infrastructure, and UPI’s integration on users’ intention to use Central Bank Digital Currency (CBDC), with likelihood of adoption as a mediating variable. This study utilized the UTAUT framework along with extension. Data were collected by utilizing convenience and snowball sampling from 415 respondents across the Eastern Region of India. The study has employed Partial Least Squares-Structural Equation Modelling (PLS-SEM) to analyse the data, utilizing bootstrapping of 5000 samples to assess the path results. A significant influence of awareness, digital financial literacy, adequate digital infrastructure, and UPI’s integration in fostering likelihood of adoption and a strong relationship between likelihood of adoption and users’ intention was observed. It confirms that the likelihood of adoption significantly mediates the relationship between the established constructs and users’ intention to use CBDC. This study contributes to both theoretical and practical aspects by identifying the likelihood of adoption as a key factor in gathering behavioural intention. It provides policymakers with an opportunity to address concerns related to digital financial literacy, adequate digital infrastructure, and UPI integration to strengthen users’ adoption and usage of CBDC, ultimately leading to a more inclusive and efficient digital economy.

This paper explores the emerging role of cryptocurrencies as a distinct asset class within the financial landscape. As digital currencies gain traction among investors and institutions, it becomes essential to analyze their unique characteristics, volatility, and potential for diversification compared to traditional asset classes such as stocks and bonds. The study examines the historical evolution of cryptocurrencies, their investment potential, and the impact of regulatory frameworks on market dynamics. Additionally, it investigates the increasing adoption of cryptocurrencies by institutional investors and the challenges they face, including market volatility and security risks. Ultimately, this research aims to provide a comprehensive understanding of cryptocurrencies as a legitimate asset class and their implications for future investment strategies. Keywords: Cryptocurrency- Asset Class- Investment- Volatility- Institutional Adoption- Regulation- Diversificatio- Financial Markets.

ABSTRACT Cryptocurrency trading has rapidly evolved into a highly dynamic and technology-driven financial domain, attracting significant attention from investors, researchers, and institutions worldwide. This paper presents a comprehensive review of modern cryptocurrency trading platforms by combining blockchain technology, artificial intelligence, and advanced trading mechanisms to create a secure, efficient, and scalable trading ecosystem. The study highlights the use of deep learning approaches such as Long Short-Term Memory (LSTM), Convolutional Neural Networks (CNN), and attention-based models for improving cryptocurrency price prediction. These techniques utilize technical indicators, trading patterns, and social media data to enhance prediction accuracy. In addition, reinforcement learning strategies are explored to optimize trading decisions and improve performance under highly volatile market conditions. Furthermore, the paper discusses real-time data integration using APIs, secure authentication mechanisms, and scalable system architectures required for continuous trading operations. It also examines the regulatory landscape of cryptocurrency, particularly in the Indian context, including taxation policies and emerging concepts like Central Bank Digital Currencies (CBDCs). Overall, this review provides insights into the development of intelligent, secure, and user-friendly cryptocurrency trading platforms such as CryptoVista. Keywords: Cryptocurrency, Blockchain, Deep Learning, Reinforcement Learning, Smart Contracts, Real-Time Data, Trading Platforms, Security, Scalability, CBDC

This article examines international approaches to preventing the use of digital currencies and cryptoassets in money laundering processes, in the context of the transformation of the global financial environment. It analyzes the key risks arising from the development of decentralized financial technologies, the expanding use of stablecoins, the use of transaction mixing services, and other tools designed to increase the anonymity of financial transactions. It is argued that the growth of cross-border mobility of digital assets complicates the identification of ultimate beneficiaries and requires the development of comprehensive financial monitoring mechanisms at the international level. The paper summarizes international anti-money laundering standards in the virtual asset sector, particularly FATF recommendations, and examines current regulatory approaches, focusing on a comparative analysis of legal regulation models for providers of virtual asset-related services, licensing and registration mechanisms, procedural requirements for customer identification, the application of the Travel Rule, and the development of risk-based financial monitoring systems. The effectiveness of combating the legalization of criminal proceeds depends to a large extent on the level of institutional coordination between financial regulators, law enforcement agencies, and international organizations. The focus is on practical tools for identifying, seizing, and confiscating crypto assets within the framework of criminal proceedings, as well as on the role of international legal assistance and cross-border information exchange in combating transnational financial schemes. It has been demonstrated that the absence of effective procedures for the actual seizure of digital assets reduces the preventive effect of criminal law measures and preserves the economic attractiveness of illegal activities in the crypto sphere. Based on the conducted research, proposals have been formulated to improve Ukraine’s national financial security system, which include harmonizing legislation with European standards, strengthening the technological capabilities of financial monitoring, developing specialized digital forensics, and deepening international cooperation in the fight against money laundering. Implementing these proposed measures will contribute to the development of a more effective and sustainable model for preventing the use of digital currencies in criminal financial processes in the context of global digitalization.

The growth of financial technology has introduced Central Bank Digital Currency (CBDC), which is basically a digital version of money issued by central banks. In this work, a blockchain-based system is proposed that uses QR codes and UID numbers to make transactions easier and more secure. Blockchain helps keep a proper record of transactions so they cannot be easily changed or tampered with. Using QR codes makes payments quick and simple, especially for everyday use. The system also uses smart contracts to handle processes automatically. Since everything runs on a decentralized network, it reduces dependency on a single authority and lowers the chances of fraud. At the same time, user privacy is maintained by storing only encrypted verification data instead of actual personal details.

The introduction of Central Bank Digital Currency (CBDC) is a game-changer in the world of global money. Given the digital realm reforming monetary systems, central banks are getting keen on CBDCs to offer a state-backed alternative to private digital currencies and payment systems. This paper aims at carrying out a brief analysis of CBDCs and their impact on monetary sovereignty in view of globalization, technological disruption and rising decentralized finance. Central Bank Digital Currencies (CBDCs) hold promise for bolstering the state’s monetary policy. However, they also pose various challenges to the financial stability of states and cross-border payments involving CBDCs. The study also mentions the changing character of the role of central banks such as the Reserve Bank of India and compares international approaches like the digital yuan of China and the digital euro of the European Union. The paper concludes that CBDCs represent an instrument to strengthen monetary sovereignty as well as a catalyst to redefine monetary sovereignty in the digital age. INTRODUCTION The Money has changed from bartering to metallic coins, paper currency, and now digital currency. Cryptocurrencies like bitcoin have been rising in value at a rapid rate in recent years. As a result, the dollar value and stock markets have been challenged. Decentralized digital currencies trade without a central authority which threatens to undermine the sovereignty of money. #Centralization In this context, countries’ central banks around the world have started to investigate the Central Bank Digital Currency (CBDC). It is a digital form of the sovereign currency that the state issues and regulates. CBDCs are regulated by an authority unlike cryptocurrencies which are decentralized and do not have a backing of a central authority over them. In a rapidly digitalizing economy, states are striving to gain more control over the monetary and financial system.At the heart of this debate surrounding the eurozone members and their exceptional trade ties with Europe lies monetary sovereignty. The emergence of digital currencies private and state raises questions of the future of this sovereignty.The study aims to critically analyze the interrelationship between CBDCs and monetary sovereignty. The implementation of CBDCs allow the central banks to strengthen their control over the monetary authority and also reveal the risks it carry.

Purpose This study aims to explore how central bank digital currencies (CBDCs) reshape the geopolitics of monetary sovereignty by shifting authority from private-led to state-driven payment infrastructures. It argues that sovereignty in monetary affairs must be understood not only as the legal prerogative to issue currency but also as control over the technological and institutional systems that underpin cross-border payments and settlements. Design/methodology/approach The study analyses two cases: the Bank for International Settlements Innovation Hub’s mBridge project and the embryonic, largely symbolic BRICS Cross-Border Payments Initiative. It builds on scholarship in currency hierarchies and infrastructural geopolitics to assess how these proposals may transform the geopolitical dynamics of payment infrastructures. Findings The cases show that CBDCs can incrementally reconfigure power within an international monetary system long anchored in US dollar dominance and Western-centric private utilities such as the Society for Worldwide Interbank Financial Telecommunication, the New York Clearing House Interbank Payments System and Continuous Linked Settlement. mBridge demonstrates how public governance can be embedded directly into code, contracts and consensus protocols, while BRICS highlights the symbolic projection of infrastructural autonomy. Research limitations/implications The findings suggest that although CBDCs can expand monetary sovereignty through infrastructural redesign, they also expose persistent structural constraints within the international monetary system. Moreover, US dollar dominance may be deeply connected to factors beyond payment infrastructures, such as global liquidity provision, the depth of US financial markets and strong network effects, which CBDCs alone may not overcome. Originality/value The study contributes by demonstrating that CBDCs function as infrastructural interventions with potential implications for geopolitics, while also linking debates on technological design to broader questions of monetary sovereignty.

The relevance of the study is determined by the need to transform financial mechanisms to ensure the transition to a circular economy in the context of the instability of the current technogenic development model. The existing gap between the financial sector and the real economy, as well as short-term market benchmarks and difficulties in monetizing externalities, which limits the financing available for sustainable development projects. The aim of the study is to develop theoretical, methodological, and practical recommendations for transforming of financial mechanisms to ensure an effective transition to a circular economy. The research methods used include the systems approach, scientific abstraction, comparative analysis, the classification method, the analysis of statistical data, and the analysis of practical cases. Research results: theoretical approaches to sustainable finance have been systematized. The author’s classification of financial instruments for the circular economy has been developed. The compliance of the partner financial system with the open-book principle necessary for the formation of effective circular ecosystems has been substantiated. The potential of digital currencies for the formation of a two-circuit monetary system that provides targeted financing for sustainable projects has been identified. A mechanism for monetizing externalities through quasi-financial instruments has been proposed. The connection between the proposed financial mechanisms and the goals of creating a naturelike economy that focuses on the regeneration of natural capital has been demonstrated. Conclusions and practical significance: The need to combine market and administrative mechanisms for regulating sustainable finance has been substantiated. Recommendations have been formulated for developing an experiment in partner financing, introducing a “colored” digital ruble, creating a unified platform for the circulation of quasi-financial instruments, and integrating nature-like criteria into the Russian taxonomy of sustainable projects.