Central bank digital currency: Practice in some countries and recommendations to Vietnam

Digital currency (DC) has attracted strong attention in recent years. It has the potential to be widely used in payment and settlement. The governments and central banks around the world are closely monitoring the development of digital currencies. A number of countries (England, Sweden, Canada, India, China, Thailand, Philippines...) are also conducting in-depth research on the central bank digital currency (CBDC) and its impact on operating the monetary policy, the financial system- banking and payment activities in the economy. An important policy question for the central banks is whether the digital currency should be issued by a central bank to be used in the payment system. This article will clearly provide the definition as well as the function of CBDCs by collecting information and data through official announcements or reports of each country’s central bank, which may be helpful for policy markers’s Vietnam in monitoring the financial system in the technology era. In addition, the article also critiques the studies and assessments of central banks in a number of countries and finds that in Vietnam, although the government has been making efforts to improve the legal framework, due to the lack of technological infrastructure leads to the inability to maximize the efficiency of resources to improve financial stability. Therefore, Vietnam has continued to review and establish the legal framework for development of digital currencies and quickly built a strong technological infrastructure.