Earlier this year, the International Monetary Fund (IMF) released a report exploring the potential of a retail central bank digital currency (CBDC) in Jordan. The analysis concluded that a cross-border CBDC could address high transaction fees. However, regarding a more mainstream retail CBDC, barriers, such as financial illiteracy and cash-oriented business models, prevent people from extensively using digital payments.
One of the common drivers for a retail CBDC is to enable different payment systems to be more interoperable. However, when the IMF analyzed Jordan’s retail payment landscape, it found the domestic payment systems and cross-border remittance markets are “well integrated” with significant competition.
However, despite a suitable product offering and a relatively young, tech-savvy population, the study found several barriers preventing Jordanians’ widespread adoption of digital payments, including financial illiteracy, high transaction costs, and cash affinity. The mission thus identified three potential policy objectives where a retail CBDC could add value:
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