Central Bank Digital Currency: Critical Analysis of the Two-Tier Model Consideration for Zambia

Abstract

This paper investigated the determinants of a Central Bank Digital Currency (CBDC) as a payment systems platform in Zambia. The study adopted a two-tier model of a CBDC and employed the methodology of using time series monthly data to ascertain if the introduction of a CBDC payment systems platform could improve the efficiency of payments systems, make a stronger national defense against AML/CFT, ensure non-discriminatory access to domestic financial services through financial inclusion and play a role in mitigating the high cost of processing currency. The key databases used in this study included Science Direct, JSTOR and Ebscohost information services and digital libraries. This is paper focuses on a critical literature review that brought out main advantages of considering a two-tiered approach in the developing jurisdiction like Zambia.

Keywords: Central Bank Digital Currencies (CBDC), Exploring, Two-Tier Model, Zambia

DOI: 10.7176/EJBM/14-16-03

Publication date:August 31^st 2022