CENTRAL BANK DIGITAL CURRENCIES AND MONETARY POLICY TRANSMISSION: MACROECONOMIC EFFECTS AND FINANCIAL STABILITY RISKS IN EMERGING ECONOMIES

As of 2026, more than 130 countries are researching, piloting, or actively deploying central bank digital currencies (CBDCs), marking one of the most significant institutional innovations in monetary policy since the adoption of inflation targeting. For emerging economies in particular, retail CBDCs promise faster and more precise monetary policy transmission, expanded financial inclusion, and reduced reliance on cash-based informal transactions. Yet these same features raise unresolved questions about commercial bank disintermediation, deposit flight during periods of financial stress, and the operational independence of central banks. This article examines the macroeconomic implications of CBDC issuance using a comparative analysis of nine emerging-market pilot and live CBDC programs launched between 2020 and 2026. Employing an event-study methodology around CBDC launch dates, alongside a panel regression linking CBDC adoption intensity to interest-rate pass-through efficiency and commercial bank deposit volatility, the study finds that CBDC introduction is associated with a measurable improvement in monetary policy pass-through but also with a statistically significant increase in deposit substitution away from smaller commercial banks during periods of macroeconomic uncertainty. The findings suggest that CBDC design choices—particularly holding limits and remuneration policy—critically determine whether the net macroeconomic effect is stabilizing or destabilizing. The article concludes with policy recommendations for central banks in emerging economies, including tiered holding limits, non-remunerated wallet design, and phased rollout sequencing to preserve financial stability while capturing the efficiency gains of digital central bank money.