It eliminates the need for exchange rate management.

Digital platforms can move large sums across borders beyond traditional controls.

Transactions become fully traceable by domestic authorities.

Easier regulation of digital assets.

Difficulty monitoring money velocity and liquidity conditions.

Greater effectiveness of interest rate transmission.

Slower disbursement and higher leakage.

Faster, more targeted delivery of fiscal aid to consumers and small firms.

Reduced control over budget execution.

They automatically stabilize demand for fiat currency.

They strengthen the central bank’s ability to manage the money supply.

They can collapse under market pressure, disrupting confidence in digital transactions

Increased lending capacity through stable deposits.

Higher profitability due to lower reserve requirements.

Deposit outflows as customers move funds directly to CBDC accounts.

It stabilizes exchange rates and neutralizes price volatility.

It reduces global liquidity, tightening access to credit in emerging markets.

It can lead to capital inflows that appreciate local currencies and alter import pricing.

Increase investment as government spending boosts demand.

Reduce exposure due to concerns about debt sustainability and currency depreciation.

Maintain investment because fiscal deficits are neutral in the long run

Imported inputs become more expensive, raising production costs.

The domestic market becomes more attractive to foreign buyers.

Export prices rise in foreign currency terms, reducing competitiveness.

Export manufacturing

Heavy capital equipment producers

Consumer goods and retail marketing

Export competitiveness improves as domestic goods become cheaper in foreign markets

The policy has no effect since exchange rates adjust automatically in open markets.

Export competitiveness declines as foreign consumers face higher import prices