Citation:

Raluca Ștefania Marin. "Central Bank Digital Currencies – An Academic Research on The Potential Design and Use Cases Regarding Cross-Border Payments" International Research Journal of Economics and Management Studies, Vol. 4, No. 4, pp. 51-57, 2025.

Abstract:

This paper investigates the design of Central Bank Digital Currencies (CBDCs) with a specific focus on enhancing cross-border payments and advancing retail CBDC applications. It examines the trade-offs inherent in developing CBDC architectures that must simultaneously address operational efficiency, regulatory compliance, and financial stability. By analysing various models of CBDC implementation, the paper proposes a comprehensive framework that integrates advanced cryptographic techniques, interoperability protocols, and privacy-preserving mechanisms to facilitate seamless and secure cross-border transactions. Empirical insights derived from simulation studies and case analyses underscore the potential of retail CBDCs to streamline international payment systems, reduce transaction costs, and mitigate settlement risks compared to traditional correspondent banking channels. The findings also highlight key challenges, including harmonising disparate regulatory environments and ensuring robust cybersecurity defences, thereby calling for enhanced collaboration among central banks and international regulatory bodies. Overall, this study contributes to the growing literature on digital currencies by providing actionable design principles for future CBDC initiatives in the evolving global financial landscape.

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Keywords:

Central Bank Digital Currencies, Retail CBDC, Wholesale CBDC, Financial Stability.