Understanding the rapid development of CBDC in emerging economies

Central Bank Digital Currencies (CBDCs) mark a significant evolution in digital finance. This study examines the factors influencing CBDC adoption, highlighting the roles of regulatory quality and digital financial access. Results indicate that regulatory frameworks, rather than the level of digital infrastructure, predominantly drive CBDC initiatives. The findings caution against the rapid deployment of CBDCs in less prepared environments, which could pose risks to financial stability. The research underscores the importance of comprehensive regulatory strategies over technological readiness for successful CBDC implementation. Developed markets are advised to consider policies that mitigate risks associated with the transition towards digital currencies. • Regulatory frameworks are critical in supporting global CBDC initiatives and their adoption. • Digital financial access does not expedite the progression of CBDC initiatives. • Premature deployment of CBDCs absent adequate infrastructure is a risk to financial stability. • Successful CBDC implementation requires comprehensive and robust regulatory strategies. • CBDC implementation requires alignment between technological infrastructure and regulation.