A Review on the Implementation of Retail Central Bank Digital Currency (CBDC)

This paper reviews academic research and policy reports on the design and implementation of general-purpose retail central bank digital currencies (CBDCs). It examines how differences in technical architecture and legal governance shape three contested outcomes: financial privacy, monetary-policy transmission, and the exercise of state power through digital payment systems. While critical literature warns that centralized digital ledgers could compromise financial privacy, create behavioral distortions near the Zero Lower Bound (ZLB), and enable state overreach, counter-arguments highlight structural mechanisms that mitigate these risks. Specifically, privacy-preserving architectures—such as "managed anonymity" piloted in China’s e-CNY—demonstrate that semi-privacy can be secured for retail users. On the monetary front, retail CBDCs offer enhanced policy effectiveness through reduced transaction costs, broadened financial accessibility for underbanked populations, and precision fiscal delivery like targeted spending and stipends. Regarding state surveillance, the non-uniqueness argument suggests that existing commercial electronic payment rails already permit legal oversight and account interventions; thus, a CBDC transition streamlines administrative execution rather than introducing a novel violation of state-private boundaries, provided robust legal frameworks are implanted. Finally, this review explicitly focuses on retail CBDCs and acknowledges its heavy reliance on theoretical literature, as limited real-world empirical data from fully operational retail CBDCs is currently available.