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.