Central Bank Digital Currencies and Their Prospects for the OIC Countries

Central Bank Digital Currencies (CBDCs) are digital currencies issued by central banks (Jung & Jeong, 2021). They represent a digital form of central bank money and differ from traditional reserves and settlement account balances (Bakar et al. 2022). CBDCs are essentially a digital version of domestic currency, with a unit of account equivalent to the respective domestic currency (Sethaput & Innet, 2023). The concept of CBDCs has gained significant global attention with discussions revolving around their drivers, approaches, and technologies (Auer et al., 2020). The evolution of digital currencies has paved the way for the development of CBDCs. The rise of cryptocurrencies, such as Bitcoin, has demonstrated the potential of digital currencies (Härdle et al., 2020). Blockchain technology is instrumental in enabling the creation and functioning of CBDCs (Arthur et al., 2018). Blockchain technology offers new opportunities for CBDC development by providing secure and transparent transaction mechanisms (Ko et al., 2018). Global trends in CBDC development indicate a growing interest among central banks in exploring the implementation of CBDCs (Koshelev, 2022). Research shows that a significant percentage of central banks are actively researching the potential of CBDCs (Doğan & Övenç, 2021). The implementation of CBDCs is seen as a way to modernize payment systems and enhance financial inclusion (Semeko, 2022). Furthermore, the issuance of CBDCs is motivated by various factors, including the need for efficient cross-border payments and improved monetary policy transmission (Garg & Kumar, 2023).