Central Bank Digital Currencies: Taxonomy, Design and Russian Specifics

Understanding the importance of CBDCs in developing the financial services sector, the Centre for Research in Financial Technologies and Digital Economy SKOLKOVO-NES is launching a project dedicated to studying various aspects of CBDCs in the context of the existing financial services landscape and potential future visions of its development. This study is the first within the project and focuses on addressing the three key issues:

(1) Why is the launch of CBDC needed? 

(2) How can it be implemented, i.e., what are the potential design elements based on the CBDC launch's goals? and  

(3) For what purposes are certain countries choosing strategies, and what are they pursuing, in particular, Russia?

Despite there are some studies devoted to the modelling of CBDCs' introduction effects and analysis of the technological and regulatory aspects of their development, there is still no full understanding of:

• What goals can be met by CBDCs? 
• What is included in the design of such currencies?
• How does the purpose of introducing a CBDC affect its design, and how does the design determine other specifics of the project and potential effects at the macro- and microlevels?

This study offers a typology of CBDC by using a systematic analysis of information from academic and practice-oriented sources and a set of strategic tools for analysing initiatives. Also, we propose an approach to evaluate the innovation potential of CBDCs and assume to use it to analyse the ideas outlined in the concept of a digital ruble presented by the Bank of Russia.

This study will be useful to anyone interested in the development prospects of CBDCs and the financial services market in general. In particular, central banks and other regulators responsible for issuing CBDCs can use it to identify the design elements that best fit their goals and objectives and evaluate the potential impact of the solutions related to CBDCs. Participants of the existing financial services sector can use the results of this study to develop their strategies for business development in the context of the emergence of CBDC based on the types and goals that a central bank chooses for itself. Besides, new participants of the financial services sector will be able to identify unoccupied niches to create new business models that are related not only to the existing products, infrastructure, and forms of money but also to promising areas for the development of data compiled in the context of the development of CBDC*.*