CBDC: Expanding Financial Inclusion or Deepening the Divide?

Custody

• Intermediaries, cash economies, and technological change in Myanmar and India. (2016)

  • Special Report, Institute for Money, Technology and Financial Inclusion (IMTFI)

  • Oreglia, E. & Srinivasan, J. (2016)

  • https://www.imtfi.uci.edu/research/2015/srinivasan_oreglia_2015.php

  • The study examines why financial intermediaries persist, despite the promises of disintermediation that have accompanied the diffusion of digital technologies. Through a comparative study of rural markets in Shan State, Myanmar, and Kerala, India, it maps out the roles played by different brokers (traders, hundi, transport companies, etc.) and financial tools (cash, gold, land, banks, etc.).

• Poor Users’ Experience of Mobile Money in Nigeria

  • Grameen Foundation (2014) https://grameenfoundation.org/documents/Nigeria-Landscape-Presentation_Dec-2014.pdf

  • The study outlines how mobile money agents act as intermediaries to enable poor users to access mobile money services. Due to the cumbersome process of signing up and using mobile money services, agents conduct 66% of user transactions.

• ‘Top Up With Driver’: Entanglements of Design, Online Drivers, and Digital Money in Indonesia

  • Parole Compendiums (2020)

  • Sunniva Sandbukt https://parole.cc/compendiums/form-follows-finance/top-up-with-driver-entanglements-of-design-online-drivers-and-digital-money-in-indonesia/

  • The study discusses how drivers who work for ride-hailing platforms become key infrastructure for users to access mobile money wallets. Due to the platform’s structure, users are able to seamlessly access mobile money by giving cash to drivers, but the drivers don’t have control over the management of their own mobile money wallets.

Access

• ‘Privacy is not for me, it's for those rich women’: Performative Privacy Practices on Mobile Phones by Women in South Asia.

  • Fourteenth Symposium on Usable Privacy and Security (SOUPS), pp. 127–142.

  • Sambasivan, N., Checkley, G., Batool, A., Ahmed, N., Nemer, D., Gaytán-Lugo, L.S., Matthews, T., Consolvo, S. & Churchill, E. (2018).

  • https://research.google/pubs/pub47247/

  • This study discusses how South Asian women own fewer mobile phones and access them by sharing between friends and relatives. The article argues for revising definitions of privacy and digital identity based on such shared use of technology.

• Privacy at the margins | The poverty of privacy: Understanding privacy trade-offs from identity infrastructure users in India.

  • International Journal of Communication

  • Srinivasan, J., Bailur, S., Schoemaker, E. & Seshagiri, S. (2018)

  • https://ijoc.org/index.php/ijoc/article/view/7046

  • This article examines how low-income users deal with state identity systems like Aadhar, a national identification system for Indian residents that assigns a 12-digit number based on biometric identifiers. Respondents weigh privacy concerns against the need to be seen by the state.

• Does mobile money matter? Exploring mobile money adoption by Ghana’s urban poor.

  • IMTFI Final Report

  • Dzokoto, V. A. & Mensah, E. C. (2012).

  • https://www.imtfi.uci.edu/research/2011/dzokoto.php

  • This study examines the impact of mobile banking products on the financial behaviors of Ghana’s urban poor one year after their introduction into the country. Ghanaians were hesitant to use mobile money because they were afraid that their transactions would not go through due to frequent network outages.

• Mobile money in a poor fishing municipality in the Philippines.

  • Poverty & Public Policy

  • Gumba, Bernadette G. (2018).

  • The study examines the use of mobile money in a poor fishing municipality in the Philippines. The authors highlight the challenges of accessing mobile money due to poor signal issues and a limited number of cell sites, and note that people were willing to wait for signals and transmissions to work as long as their transactions would be completed.

Transaction Finality and Reversibility

• Pay or delay: the role of technology when managing a low income.

  • Proceedings of the SIGCHI Conference on Human Factors in Computing Systems

  • Vines, John, Paul Dunphy, and Andrew Monk. (2014)

  • https://dl.acm.org/doi/10.1145/2556288.2556961

  • The article examines how low-income individuals in Northeast England use techniques of delaying payments when they use digital banking technologies. The authors recommend that instead of instant and irrevocable settlements, electronic and digital banking technologies should be more aligned with the financial planning practices of users and allow flexibility in payment settlement.

• The Changing Face of Money: Preferences for Different Payment Forms in Ghana and Zambia.

  • Journal of Applied Business and Economics

  • Dzokoto, V. A., Appiah, E.N., Chitwood, L. P. & Imasiku, M. L. (2016)

  • https://articlegateway.com/index.php/JABE/article/view/860/808

  • This article examines the impact of the planned 2013 currency redenomination of the Zambian national currency, the Kwacha, on mobile money use in Lusaka, Zambia. The study shows how people see mobile money as fast but not safe and therefore not for long-term saving.

Data Trails

• Accounting in the margin: financial ecologies in between big and small data

  • Civitas: Journal of Social Sciences

  • Ossandón, J., et. al. (2017) https://revistaseletronicas.pucrs.br/index.php/civitas/article/view/25021

  • This study situates the social studies of household finances at the intersection of big data (market devices such as scorings and credit cards used by financial companies) and small data (practices of everyday calculations developed by users). It explores how big data footprints are used, and how users deal with unexpected commercial ramifications of everyday spending.

• Data-mining for development? Poverty, payment, and platform

  • Territories of poverty: Rethinking north and south

  • Maurer, B. (2015)

  • https://escholarship.org/uc/item/66w4x8n8

  • This chapter explores the practical consequences of the industry and philanthropic shift from 'mobile banking' to 'mobile payment.' A case study of Kenya's M-Pesa illustrates the transition from 'poverty capital' to 'poverty payment,' and the significance of the retail payments industry in this discussion.

• Money is data–the platformization of financial transactions.

  • Information, Communication & Society

  • Westermeier, C. (202)

  • https://www.tandfonline.com/doi/full/10.1080/1369118X.2020.1770833

  • This article studies recent initiatives in Europe to merge the digital and the financial spheres by integrating transactions that run through established financial infrastructures into digital platforms. This platformization of financial transactions has transformed money into a form of transactional data. The article argues that the technological changes and regulations are pushing both the political economy of payments and banking towards the platform model.

• Perpetual debt in the Silicon Savannah

  • Boston Review

  • Donovan, K. P. & Park, E. (2019)

  • https://bostonreview.net/articles/kevin-p-donovan-emma-park-tk/

  • Kenya's poor were among the first to benefit from digital lending apps; now some consider it slavery. This journalistic piece explores emergent regimes of indebtedness exacerbated by the financial technology industry, that have sparked new waves of social problems.

Transacting Across Distance

• The role of mobile phones in the mediation of border crossings: A study of Haiti and the Dominican Republic.

  • The Australian Journal of Anthropology

  • Horst, H. A. & Taylor, E. B. (2014)

  • This article examines how Haitian migrant workers use technologies such as mobile phones to keep in touch with their families, organize economic activities, and circulate remittances. The authors show how mobile technology has become a part of the infrastructure of the border, making different kinds of mobility possible.

• Ringing the living and the dead: Mobile phones in a Sepik society

  • The Australian Journal of Anthropology

  • Telban, B. & Vávrová, D. (2014)

  • This article discusses how people in Sepik, a province of Papua New Guinea province, make sense of mobile phone towers built by Digicel. They believed mobile phones would enable them to call both the living and the dead. The authors examine how people contextualize mobile phones within their cosmologies and thus generate a new modality of technology use.

• From kinship to link-up: Cell phones and social networking in Jamaica

  • Current Anthropology

  • Horst, H. & Miller, D. (2005)

  • The authors show how low-income Jamaicans use mobile phones to establish social networks called “linkup.” The authors argue that linkup exemplifies a broader pattern of local networking in Jamaica that cuts across kinship formations and social organization, and contributes to the adoption of mobile phones across varied geographies.

India

• India is a large country with a complex economy. India has 17% of the world's unbanked population and of the adult account holders, as many as two thirds have not made a digital merchant payment. On the other hand, the government and the Reserve Bank of India have put in place major initiatives to build financial inclusion and an active digital economy, including the Indian stack, the Aadhaar ID, the Universal Payments Interface (UPI) for instant and interoperable payments, and an active fintech environment. A CBCD is expected in the budget year 2022-2023.

• In-Country Researchers

  • Dr. Debashis Acharya and team

    • University of Hyderabad

    • Focus of study: small business owners, self-employed workers, and university students

    • Region: Greater Hyderabad, Muskanipet and Vallampatla (Siddipet District), Pochampally weavers village (Telangana state)

  • Simiran Lalvani

    • University of Oxford

    • Focus of study: food hawkers, home chefs, and app-based food delivery couriers

    • Region: Mumbai, Maharashtra

  • Dr. Nima Yolmo

    • University of South Carolina

    • Focus of study: working-class women managing households and small enterprises

    • Region: Darjeeling, West Bengal

• Blog Posts

  • India’s CBDC Needs to Be People-Centric by Debashis Acharya (School of Economics, University of Hyderabad) and Alok Kumar Pandey (Department of Anthropology, University of Hyderabad)

Indonesia

• Indonesia is home to 7% of the world's unbanked population, corresponding to almost half of the country’s adult population. The Bank of Indonesia and the Indonesian Financial Services Authority have put in place initiatives to build a digital economy, including the Indonesian identification card KTP, e-money and digital banking regulation, the interoperable QR code payment system QRIS, and an open banking environment. The Bank of Indonesia is exploring the possibility of a CBCD. The country hosted a Tech Sprint in collaboration with the BIS in 2022, which included a financial inclusion challenge. The winning solution would secure interoperability between online and offline CBDC transactions.

  • In-Country Researchers

    • Kathleen Azali, Pradipa P. Rasidi, and Maria Karienova

      • Independent researchers

      • Focus of study: activists, conventional taxi and rideshare drivers, and self-employed workers who navigate multiple e-commerce platforms

      • Region: Greater Surabaya Area (East Java) and Jakarta

    • Agus Indiyanto and team

      • Gadjah Mada University

      • Focus of study: university students, office workers, civil servants, property businessmen, shop owners, homemakers, women with home-based businesses, farmers

      • Region: Lampung, Temanggung (Middle Java), Jogjakarta, Kuningan (West Java), Samarinda (East Kalimantan)

    • Caroline Mangowal, Erlyn Shukmadewi, and Amiril Zulhaj

      • RISE Indonesia Research

      • Focus of study: women entrepreneurs

      • Region: Jakarta  (Northwest Java)

    • Dr. Sunniva Sandbukt

      • IT-University of Copenhagen

      • Focus of study: rideshare and delivery drivers and platform integrated digital wallets

      • Region: Yogyakarta, south-central Java

• Blog Posts

  • Public Perception and Acceptance of Digital Payment Systems in Indonesia by Agus Indiyanto (Universitas Gadjah Mada, Indonesia)

  • Digital versus Cash Use among Women Urban Entrepreneurs in Greater Jakarta by Caroline Mangowal (PhD, Founder of RISE Indonesia)

  • Hierarchies of Participation: Experiences with Cashlessness in Indonesia by Sunniva Sandbukt (Assistant Professor at the IT-University of Copenhagen)

Nigeria

• Nigeria is a lower middle-income country with a large informal sector and low rate of financial inclusion. This is despite a series of financial inclusion policies and initiatives to promote digital payments. In 2021 Nigeria introduced a CBDC, the eNaira, to fulfill several goals in financial development and stability as well as to promote financial inclusion. The adoption was slower than expected despite the fact that it offered customers the possibility to create an eNaira wallet without an official ID or a bank account. Factors including low trust in government, poor communication around the rollout, and technical issues with the wallet app also affected the low uptake. The second phase was introduced in August 2022 with the specific goal of onboarding unbanked and underserved groups.

  • In-Country Researchers

    • Dr. Betty Ackah

      • Simon Fraser University

      • Focus of study: students, working professionals, and traders

      • Region: various regions across Nigeria

    • Dr. Oludayo Tade and Dr. Oluwatosin Adeniyi

      • University of Ibadan

      • Focus of study: cash-dependent users (traders, musicians, elderly), and digital-dependent users (e-commerce traders)

      • Region: South West region

    • Dr. Olayinka David-West and Immanuel Ovemeso Umukoro

      • Lagos Business School, Pan-Atlantic University

      • Focus of study: understanding the demand and supply sides of the eNaira

      • Region: primarily Lagos, collected data from 6 geopolitical zones

• Blog Posts

  • Nigeria’s eNaira: Enabling Possibilities by Olayinka David-West (Professor of Information Systems, Lagos Business School) and Immanuel Umukoro

Mexico

• Mexico is an upper middle-income country with well developed financial regulation and the second largest fintech ecosystem in Latin America. In 2021, Mexico was the third largest receiver of remittances in the world, of which 95% came from the US. Four percent of households in Mexico receive remittances. Financial literacy is low, at 32% and so is access to financial accounts for the adult population (68%). A financial inclusion policy is in place. One particular goal is the movement towards digital payments with the introduction of CoDi. The Central Bank of Mexico has announced the introduction of a retail CBDC in 2025. It is envisioned to be flexible, operating with an account-based system that can work in parallel to a token-based system, thus meeting different user needs.

  • In-Country Researchers

    • Dr. Bernardo Batiz-Lazo and Ignacio González Correa

      • Northumbria University; University of California, Davis

      • Focus of study: remittance infrastructure between Mexico and the US

      • Region: Mexico City

    • Dr. Clément Crucifix

      • University of California, Irvine

      • Focus of study: women, across age ranges and socioeconomic backgrounds, many of whom receive government transfers or remittances

      • Region: Municipality of Hueytamalco, Northern Sierra of Puebla

    • Dr. Magdalena Villarreal and Ana Sofia Torres

      • CIESAS Occidente

      • Focus of study: families, workers in both the formal and informal economies, in Mexico/US border towns and center-of-the-country cities

      • Region: Tijuana and Mexicali, Northern Mexico; Guadalajara and San Luis Soyatlan in Western Mexico

• Blog Posts

  • Frictions to Implement a CBDC: A View from the US-Mexico Family Remittance Corridor by Bernardo Bátiz-Lazo (Northumbria University and Universidad Anahuac) and Ignacio González Correa (University of California, Davis)

  • Challenging Common Assumptions about Access to Financial Services: Reflections from Rural Mexico by Clément Crucifix (University of California, Irvine)