Initiation, Innovation, Implementation and Integration of CBDC in Digital Virtual Payment Systems

There is a shift in digital payment system from digital money to virtual digital currency called Central Bank Digital Currency (CBDC). CBDC is programmable currency issued by central banks and sovereign authorities. CBDC is having combined features of cryptocurrency and fiat currency. The main objective of introducing digital virtual currency to minimize the operation cost of currency management which includes currency printing, distribution and storage. It also increases the accountability and traceability of currency. CBDC addresses the country major issues of the money laundering, counterfeit currency and terrier finance. Using CBDC, we can provide the transparent and traceable government welfare schemas and subsidiary benefits to the common people. In this paper, we propose a four stage model including initiation, innovation, implementation and integration of CBDC to make effective, efficient, secure, transparent and traceable global payment systems. The initiation model describes the need of digital virtual currency, introducing novelty to existing payment channels or processes, leading to increase the digitization. The innovation model enhances, upgrades and transforms the payment systems to the global standard payment systems to solve the cross-border payments. The implementation model describes the underlying technologies, distribution models and different forms of CBDC. The integration model describes how we can integrate to existing payment systems or channels to enhance the performance, efficiency, security and privacy of user services.