After a series of case study, report analysis and the in-depth interviews, this research proposes an evaluation framework and several insights into the CBDC issuance on the basis of the TA theory. In particular, the interdisciplinary issue gets involved in the economic, political, social or other aspects, and tends to result in the complexity of policy making process. The adoption of the TA provides decision makers, for example a central bank, some practical approaches to clarify the key stakeholders, potential impacts and challenges. Therefore, conclusions to this research are as follows:
Conclusion 1. Overall, although the time frame was not specifically defined during the interviews, seven participants deemed to reach a consensus that in the short term (five years), only countries with strong motivations and appropriate social and cultural environments are eligible to issue a CBDC, for example e-krona in Sweden, e-peso in Uruguay, digital RMB in mainland China and Eastern Caribbean Central Bank (ECCB), whereas in the long term, the authorities are supposed to consider multi-factors including international competition, ecosystem creation and possible revolution in IT management when it comes to CBDC issuance.
Conclusion 2. Among the interviewees, regulators have strong pronounced views on the financial stability by maintaining banking system balance, and reaffirm that central banks will never take over banking’s business as a response to the concerns from commercial banks. Academic members pay more attention on the interlinkage and interaction among nations, and “Game Theory” may be applied to the following discussion. As for technical providers, they believe as the technology development utilizes human beings to leave their digital footprints on cyberspace, for example all transaction records via CBDC payments, the management in engineering development and financial systems is faced with admittedly urgent reforms.
Conclusion 3. Potential impacts differ from the types of a CBDC: A wholesale CBDC with legally-compliant principles should not impose threats to the existing system, but merely optimizes the procedure as an option of technology selection; in contrast, a retail CBDC with no well-defined designs has more uncertainties and highly relies on social and cultural environments because it may change the existing KYC policy, AML approaches, privacy protection and social control. Therefore, a better pathway for a regulator would be: begin with known methods, such as wholesale applications, and gradually extend to retail scenarios.
Conclusion 4. However, despite a comprehensive assessment of potential impacts regarding CBDC issuance, the risks could be unpredictable because it is challenging for authorities to select a precise path to examine, whether it be design approaches or engineering architecture. To be fair, CBDC deems to have a long way to go, but this thesis provides a framework for an overall evaluation of CBDC issuance from a policy-making perspective.
Conclusion 5. By integrating diverse opinions from academic and industry experts as supporting evidence, some insights are induced into three points: (i) Indeed, the technological uncertainties and complexity make the policy-making process more treacherous; (ii) But with an appropriate framework, such as EPSILON, influential aspects and impacts can be well-identified; (iii) An incremental assessment is not
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merely beneficial to remain financially stable but to create an ecosystem with clear legislation or regulation.
To recapitulate, digitalization is turning into an explicit mainstream. With this trend, Fintech becomes more popular and applicable, and it is foreseeable that the form of fiat money is facing with transformation. The proposal of the CBDC issuance, as an emerging concept, drives us to reflect on the form of current national currency, shed light on the next phase of electronic payment system and is absolutely worth further exploration. This thesis gives a bottom-up evaluation by including the opinions from critical participants. Hence, policymakers, and monetary regulators in particular, should stay open-minded to the following developments, and promptly respond with related surveys or regulations under the premise of understanding the boundary of innovation.
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7. Acknowledgements
The work was enhanced by the gracious assistance of many people. First, my special thanks go to Professor Wu ([email protected]), Professor Huang ([email protected]) and Professor Cheng ([email protected]) for all efforts and those helpful comments on the first draft of this thesis. Without their guidance, I cannot complete this research.
Other instructors whose comments and ideas I made use of include the defense committee ([email protected]; [email protected]), Expert Srinivas Yanamandra at the New Development Bank (NDB), Expert John Kiff at the International Monetary Fund (IMF) and the team members who participated the Project Stella at European Central Bank (ECB): Andrej Bachmann and Dirk Bullmann.
Particularly, I would like to thank the respondents who accepted the interview invitation and shared their observation based on their empirical experiences regarding the CBDC evaluation. Meanwhile, I should acknowledge the helpful feedback from the Riksbank, the Lietuvos bankas, and the Monetary Authority of Singapore (MAS), which assisted me to clarify the research framework. In addition to the academic resources, the supports and assistance from my friends, all reviewers and the administrative staff are worth addressing.
Above all, I wish to express my thanks to my beloved family for their cheerful accompany and devotion because their words always motivate me to explore more and deeper.
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Appendix 1