Central bank digital currency, poverty reduction and the United Nations sustainable development goals

Ozili, Peterson K (2023): Central bank digital currency, poverty reduction and the United Nations sustainable development goals. Published in:

Abstract

This paper examines the role of central bank digital currency (CBDC) for poverty reduction and sustainable development. In the paper, I argue that a CBDC can eliminate poverty by increasing financial inclusion which gives poor people access to affordable credit and other basic financial services which they can use to improve their welfare, thereby enabling them to rise above poverty, and achieve the United Nations sustainable development goal of eradicating poverty. This argument is valid only if a central bank digital currency is designed to incorporate features that increase financial inclusion. The argument may not be valid in cases where a CBDC is not designed to increase financial inclusion as is the case in some developed countries. The implication is that a CBDC can lead to poverty reduction only when the CBDC design incorporate features that increase financial inclusion. Policy makers can ensure that the CBDC used in their countries is designed to incorporate features that increase financial inclusion which is vital for poverty reduction and for achieving the United Nations sustainable development goal of eradicating poverty in all its forms.

• Item Type: MPRA Paper
• Language: English
• Keywords: CBDC, central bank digital currency, financial inclusion, poverty reduction, sustainable development goals, United Nations.
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General > Q01 - Sustainable Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

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