The Evolution of Digital Banking with Central Bank Digital Currencies (CBDC):  Opportunities and Challenges

Navaei, Niloufar

doi:10.22034/apj.2025.725726

The Evolution of Digital Banking with Central Bank Digital Currencies (CBDC): Opportunities and Challenges

Document Type : Review Paper

Author

Niloufar Navaei

Ph.D student in finance majoring in banking, science and research department

10.22034/apj.2025.725726

Abstract

Central Bank Digital Currencies (CBDCs) represent a new generation of digital money, created and supported under the authority of central banks. This cutting-edge technology, with its potential to bring transformative changes to traditional payment infrastructures and to revolutionize global payment systems, has captured the attention of researchers and financial industry professionals alike.

This study examines the challenges and opportunities associated with CBDCs during the 2018–2024 period. To this end, a systematic search was conducted across eight reputable academic databases, resulting in the identification of 62 relevant articles. After applying screening criteria, 53 articles were selected for final analysis and for the development of this review paper.

An analysis of these articles reveals a significant increase in interest in CBDCs in recent years. Central banks around the globe are actively exploring or piloting their own digital currency projects. The potential benefits of CBDCs include enhanced efficiency and inclusivity in payments, strengthened financial stability, and innovation in financial services. However, challenges such as privacy concerns, cybersecurity risks, and the potential for misuse also persist. Consequently, further research and comprehensive regulatory frameworks are essential to fully understand and manage the benefits and risks of CBDCs.

Keywords

Central Bank Digital Currency

digital payments

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