Central Bank Digital Currency: a new national economic sovereignty instrument : The case of Algeria

Abstract

This research paper aims to present general concepts related to Central Bank Digital Currencies CBDCs, which refer to a virtual currency, similar to crypto currency, created and issued by a central bank. This study also involves analyzing the conditions and some of the consequences of such a financial innovation on Algerian economy. The study concluded that if successful, CBDCs could ensure that, as economies go digital, the general public would retain access to the safest form of money. This, could promote diversity in payment options, make cross-border payments faster and cheaper, increase financial inclusion and possibly facilitate fiscal transfers in times of economic crisis. As the research shows, In the Algerian case, the adoption of the Algerian Digital Dinar should allow greater financial inclusion, to avoid cash shortages in the long run, allow greater traceability of financial transactions and may gradually reduce the informal economy.