Core Focus: The fundamental difference between advanced and emerging economy CBDC strategies, with emerging markets viewing retail CBDCs as transformative policy tools for financial inclusion rather than incremental payment efficiency improvements.

In-Depth Notes:
Unlike advanced economies, where CBDCs are primarily motivated by concerns about payment efficiency, strategic autonomy, and the decline of cash, emerging markets view central bank digital currencies as transformative policy tools with financial inclusion as the primary objective. The Central Bank of Nigeria’s Payments System Vision 2028, for example, explicitly targets bringing over 50 million unbanked and underbanked Nigerians into the formal economy through digital currency and stablecoin integration . This represents a fundamentally different strategic orientation: the CBDC is not merely a complement to existing payment systems but a mechanism for structural transformation of the financial landscape.

The Financial Inclusion Gap in Emerging Markets:
The financial inclusion challenge in emerging markets is substantial. Traditional banking infrastructure alone cannot bridge the deep financial inclusion gap in many countries . The OECD has noted that CBDCs have the potential to impact economies by improving payment efficiency and financial inclusion, with the specific effects depending on the design and implementation of each CBDC . In Nigeria, the cashless payments market is dominated by mobile money platforms, but significant segments of the population—particularly in rural areas—remain outside the formal financial system. The CBN’s strategy of using the eNaira as the foundational rail for public-sector disbursements, including civil servants’ salaries, pensions, and social welfare programmes, represents a calculated move to force inclusion by making the CBDC the default medium for government value transfer .

Programmable Social Inclusion:
The key differentiator for emerging market CBDCs is the integration of programmable features directly into the inclusion strategy. Nigeria’s eNaira, for example, is being repositioned to support programmable social interventions. Social intervention funds can be coded with specific spending parameters and expiration dates, drastically reducing administrative leakage and ensuring capital actually reaches targeted unbanked demographics in rural areas . This represents a fundamental shift from viewing CBDCs as payment instruments to viewing them as policy delivery mechanisms. The CBN’s PSV 2028 explicitly states that the programmable money feature of digital currency could have additional features such as time-limits, purpose-specific usage, splitting payments, and sub-wallets .

Pragmatic Design Principles:
Dr Kingsley Obiora, a former Deputy Governor of the Central Bank of Nigeria, has articulated the pragmatic design principles for CBDCs in emerging markets. Success depends on design features that open the system to new users while protecting the stability of the financial sector . Banks remain the backbone of financial intermediation—they transform deposits into loans, operate payment systems, and fund economic activity. If a large share of deposits were to shift into CBDC wallets, banks could face higher funding costs and reduced lending capacity . This potential deposit migration risk means a CBDC would ideally function as a payment option rather than a direct substitute for bank accounts . A tiered account structure linking balance and transaction thresholds to user verification levels can expand access while protecting financial stability.