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--- cbdc:public:cbdc_omg:04_doc:20_comments:brp:q03:start [2022/05/13 19:47]
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+++ cbdc:public:cbdc_omg:04_doc:20_comments:brp:q03:start [2022/06/17 18:37] (current)
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 ====== Question: 03. Could a CBDC affect financial inclusion? Would the net effect be positive or negative for inclusion? ======
-[[cbdc:private:cbdc_omg:04_doc:20_comments:brp:start| Return to CBDC Benefits, Risks, and Policy Considerations ]]
+|< 100% >|
+| [[cbdc:public:cbdc_omg:04_doc:20_comments:brp:start| Return to CBDC Benefits, Risks, and Policy Considerations ]]  |  <WRAP>
+<html><b>
+<a href="mailto:[email protected]?Subject=OMG's CBDC WG Response:
+Question: 03. Could a CBDC affect financial inclusion? Would the net effect be positive or negative for inclusion?
+">Provide Feedback</a></b>
+</html>
+</WRAP>  |
 This is a compound question, but the second part of the question relies on the first.
 ===== Question =====
-[[cbdc:private:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
+[[cbdc:public:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
   - **Could a CBDC affect financial inclusion?**
@@ Line 11: / Line 20: @@
 ===== Answer =====
-[[cbdc:private:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
+[[cbdc:public:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
 ==== Could a CBDC affect financial inclusion? ====
-[[cbdc:private:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
+[[cbdc:public:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
-The answer to these questions depends on the [[cbdc:private:cbdc_omg:04_doc:15_common:start| Currency Model]] underlying the CBDC. Based on the content of the White Paper, it appears as if the concept of "inclusion" means the participation of those who rely on [[cbdc:private:cbdc_omg:8_append:20_glossary:nonbank_money]].
+The answer to these questions depends on the [[cbdc:public:cbdc_omg:04_doc:15_common:start| Currency Model]] underlying the CBDC. Based on the content of the White Paper, it appears as if the concept of "inclusion" means the participation of those who rely on [[cbdc:public:cbdc_omg:8_append:20_glossary:nonbank_money]].
 The World Bank defines Financial as:
@@ Line 36: / Line 45: @@
 <figure financeInclServ>
-{{  :cbdc:private:cbdc_omg:04_doc:20_comments:brp:q03:screen_shot_2022-04-14_at_12.21.57_pm.png?375  |}}
+{{  cbdc:04_doc:20_comments:brp:q03:screen_shot_2022-04-14_at_12.21.57_pm.png?375  |}}
 <caption>An Overview of Financial Inclusion Services((
 Tp, Shabna Mol.,
@@ Line 50: / Line 59: @@
 <figure financeExclServ>
-{{  :cbdc:private:cbdc_omg:04_doc:20_comments:brp:q03:screen_shot_2022-04-14_at_12.34.27_pm.png?375 |}}
+{{  cbdc:04_doc:20_comments:brp:q03:screen_shot_2022-04-14_at_12.34.27_pm.png?375 |}}
 <caption>An Overview of Financial Exclusion((
 Tp, Shabna Mol.,
@@ Line 76: / Line 85: @@
 ==== Would the net effect be positive or negative for inclusion? ====
-[[cbdc:private:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
+[[cbdc:public:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
-This would require more study; however, the Savanta: ComRes & the Financial Conduct Authority did a study which is a great first step in understanding the barriers to adoption of Digital Currency and/or Digital Accounts.
+This would require more study; however, the Savanta: ComRes & the Financial Conduct Authority did a study which is a great first step in understanding the barriers to adoption of Digital Currency and/or Digital Accounts. ((
-((
 Savanta: ComRes & the Financial Conduct Authority,
 __Understanding cash reliance – qualitative research__,
@@ Line 97: / Line 105: @@
 ===== Examples =====
-[[cbdc:private:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
+[[cbdc:public:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
-The following "desirements" are from the [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:15_summary:start&do=edit | White Paper]] as identified by the [[https://www.omg.org/ | Object Management Group's ]] report called [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:15_summary:start | White Paper Analysis]]:
+The following "desirements" are from the [[https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf | White Paper]] as identified by the [[https://www.omg.org/ | Object Management Group's ]] CBDC WG report called [[cbdc:public:cbdc_omg:04_doc:12_summary:start | White Paper Analysis]]:
 <table>
-<caption>Example of mapping Financial Inclusion requirements identified during the White Paper Analysis conducted by OMG.</caption>
+<caption>Example of mapping Financial Inclusion requirements identified during the White Paper Analysis conducted by OMG's CBDC WG.</caption>
 ^ Requirements | <WRAP>
   : B: B0007, B0008, B0009, B0010, B0011, B0012, B0013, B0014, B0015, B0018, B0019, B0028, B0029, B0030, B0031, B0033, B0034, B0035, B0038, B0041, B0043, B0045, B0046, B0047, B0048, B0049, B0054
@@ Line 112: / Line 120: @@
 ==== Discussion of Examples ====
-[[cbdc:private:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
+[[cbdc:public:cbdc_omg:04_doc:20_comments:brp:q03:start| Return to Top]]
-The following discussion covers both of the [[cbdc:private:cbdc_omg:04_doc:15_common:start| Currency Models]]:
+The following discussion covers both of the [[cbdc:public:cbdc_omg:04_doc:15_common:start| Currency Models]]:
-  * [[cbdc:private:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start| Digital Cash Model ]]
+  * [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start     | Digital Cash Model ]]
-  * [[cbdc:private:cbdc_omg:04_doc:15_common:08_currency_models:15_accounts:start| Digital Account Model ]]
+  * [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:15_accounts:start | Digital Account Model ]]
 <table>
@@ Line 150: / Line 158: @@
 <figure availability>
 <caption>Network Availability in the US</caption>
-{{  :cbdc:private:cbdc_omg:04_doc:20_comments:brp:screen_shot_2022-03-23_at_3.17.56_pm.png?700  |}}
+{{  cbdc:04_doc:20_comments:brp:screen_shot_2022-03-23_at_3.17.56_pm.png?700  |}}
 </figure>
@@ Line 203: / Line 211: @@
   : 2. liquidity risk
 </WRAP>|<WRAP>
-The only way to offer the **safest digital asset** is to develop [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash]].
+The only way to offer the **safest digital asset** is to develop [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash]].
 </WRAP>|
 ^ B0028 ^ Offer the general public broad access to digital money: <WRAP>
@@ Line 209: / Line 217: @@
   : 2. liquidity risk
 </WRAP>|<WRAP>
-The only way to offer the **safest digital asset** is to develop [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash]].
+The only way to offer the **safest digital asset** is to develop [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash]].
 </WRAP>|
 ^ B0029 ^ Support basic purchases of: <WRAP>
@@ Line 220: / Line 228: @@
 </WRAP>|
 ^ B0030 ^ Support benefit payments directly to citizens | <WRAP>
-U.S. States like [[https://www.cdss.ca.gov/ebt-card | California]] would claim that this already exists with [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:e:ebt | Electronic Benefits Transfer (EBT)]].
+The U.S. States like [[https://www.cdss.ca.gov/ebt-card | California]] would claim that this already exists with [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:e:ebt | Electronic Benefits Transfer (EBT)]].
 The FinTech industry would say that this is already possible, especially with the rise of [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:m:mobile_payment | Mobile Payment Systems]] such as Apple Pay or Google Pay.
@@ Line 228: / Line 236: @@
   : 2. liquidity risk
 </WRAP>|<WRAP>
-The only way to offer the **safest digital asset** is to develop [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash]].
+The only way to offer the **safest digital asset** is to develop [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash]].
 </WRAP>|
 ^ B0033 ^ Support a level playing field in payment innovation for private-sector firms of all sizes | <WRAP>
@@ Line 264: / Line 272: @@
 </WRAP>
-Also see: [[cbdc:private:cbdc_omg:8_append:50_other:start]]
+Also see: [[cbdc:public:cbdc_omg:8_append:50_other:start]]
 </WRAP>|
@@ Line 297: / Line 305: @@
 Sales taxes are already collected by the merchant at the point of sale.
-The Internal Revenue Service (IRS) uses third-party payment processors for payments by debit and credit card. It's safe and secure; your information is used solely to process your payment.((
+The Internal Revenue Service (IRS) uses third-party payment processors for payments by debit and credit card. It's safe and secure; your information is used solely to process your payment. ((
 Internal Revenue Service (IRS),
 __Pay Your Taxes by Debit or Credit Card or Digital Wallet__,
@@ Line 317: / Line 325: @@
   : 3. other federal payments
 </WRAP>| <WRAP>
-U.S. States like [[https://www.cdss.ca.gov/ebt-card | California]] would claim that this already exists with [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:e:ebt | Electronic Benefits Transfer (EBT)]]. This could be expanded to a national level, but would require Laws and Regulations to change.
+The U.S. States like [[https://www.cdss.ca.gov/ebt-card | California]] would claim that this already exists with [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:e:ebt | Electronic Benefits Transfer (EBT)]]. This could be expanded to a national level but would require Laws and Regulations to change.
 According to the IRS((
@@ Line 326: / Line 334: @@
 )):
-  : //The best and fastest way to get your tax refund is to have it electronically deposited for free into your financial account. The IRS program is called direct deposit. You can use it to deposit your refund into one, two or even three accounts.//
+  : //The best and fastest way to get your tax refund is to have it electronically deposited for free into your financial account. The IRS program is called direct deposit. You can use it to deposit your refund into one, two, or even three accounts.//
   : //Eight out of 10 taxpayers get their refunds by using Direct Deposit. It is simple, safe, and secure. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.//
@@ Line 344: / Line 352: @@
 </WRAP>|
 ^ B0054 ^ Attract risk-averse users to CBDC |<WRAP>
-The only way to offer the **safest digital asset** is to develop [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash]].
+The only way to offer the **safest digital asset** is to develop [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash]].
-See section answer for [[cbdc:private:cbdc_omg:04_doc:20_comments:brp:q13:start]]
+See section answer for [[cbdc:public:cbdc_omg:04_doc:20_comments:brp:q13:start]]
 </WRAP>|
 ^ P0003 ^ Complement current forms of money and methods for providing financial services |<WRAP>
@@ Line 362: / Line 370: @@
 </WRAP>|
 ^ P0025 ^ CBDC intermediary would need to verify the identity of a person accessing CBDC |<WRAP>
-Many systems are now using [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:t:2fa | Two-Factor Authentication (2FA) ]] requiring [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:b:biometrics |Biometrics ]] (i.e., facial recognition, fingerprints, etc) or [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:o:otp | One-Time PIN (OTP)]]. These 2FA methods generally require the user to be physically present to successfully login or to have access to a mobile device like a phone or tablet.
+Many systems are now using [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:t:2fa | Two-Factor Authentication (2FA) ]] requiring [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:b:biometrics |Biometrics ]] (i.e., facial recognition, fingerprints, etc) or [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:o:otp | One-Time PIN (OTP)]]. These 2FA methods generally require the user to be physically present to successfully log in or to have access to a mobile device like a phone or tablet.
 Also see [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:1.4_req:2_nonfunc:25_security:authenticity | OMG DIDO-RA section on  Authenticity]].
 </WRAP>|
 ^ P0026 ^ CBDC transactions would need to be final and completed in real-time |<WRAP>
-CBDC Transactions need to compete with the current Currency Model used by the financially excluded, which is primarily cash partly because it is "real-time". You see something, you want to buy it, you have the cash, you complete the transaction then and there.
+CBDC Transactions need to compete with the current Currency Model used by the financially excluded, which is primarily cash partly because it is "real-time". You see something, you want to buy it, you have the cash, and you complete the transaction then and there.
 </WRAP>|
 ^ P0027 ^ CBDC a risk-free asset |<WRAP>
@@ Line 373: / Line 381: @@
 This research identifies three key factors that drive cash reliance in general. In factors in order of
-the importance are((
+the importance is ((
 Savanta: ComRes & the Financial Conduct Authority,
 __Understanding cash reliance – qualitative research__,
@@ Line 381: / Line 389: @@
 )):
-  : 1. //Avoiding overspending: For most people with a reliance on cash, avoiding overspending and living within their means was the main reason for relying on cash. Respondents felt that using cash stops them from spending more than they have, helps them to keep track of spending, and puts enough friction into the payments process to allow them to evaluate whether they want to go through with the purchase. The physical nature of cash was also helpful in making budgeting decisions easier, particularly amongst those with a low cognitive ability for budgeting.//
+  : 1. //Avoiding overspending: For most people with a reliance on cash, avoiding overspending and living within their means was the main reason for relying on cash. Respondents felt that using cash stops them from spending more than they have, helps them to keep track of spending, and puts enough friction into the payments process to allow them to evaluate whether they want to go through with the purchase. The physical nature of cash was also helpful in making budgeting decisions easier, particularly among those with a low cognitive ability for budgeting.//
   : 2. //Ingrained habit: In all human behavior, there is a default option. For those in this research, when budgeting, using cash is often the default option. Using a different approach to budgeting would be cognitively effortful for many, and for those with low financial capabilities, very challenging.//
   : 3. //Distrust of alternatives: Many respondents have concerns about fraud, personal error, and privacy when considering using alternatives to cash such as credit or debit cards. Concern about fraud and personal error is often a function of low digital capacity.//
@@ Line 392: / Line 400: @@
-The Better than Cash Alliance held an event and part of the program, they held a moderated an Oxford-style mock debate entitled //“Is Cash the Enemy of Financial Inclusion?”// which was a thought-provoking approach to discussing the pros and cons of cash in financial inclusion. Table {{ref>cashDebate}} is a summary of that debate.((
+The Better than Cash Alliance held an event and as part of the program, they held a moderated an Oxford-style mock debate entitled //“Is Cash the Enemy of Financial Inclusion?”// which was a thought-provoking approach to discussing the pros and cons of cash in financial inclusion. Table {{ref>cashDebate}} is a summary of that debate.((
 Better than Cash Alliance,
 __Is Cash the Enemy of Financial Inclusion?__,
@@ Line 410: / Line 418: @@
 | Cash works for people who are unbanked – they have developed mechanisms that allow them to operate in the cash economy, so why “fix” a system that is not broken?      | Digital payment services can bring huge cost savings and increase efficiency for payers. They are also often cheaper or the only access option for payees, especially in remote areas and rural communities |
 | People like cash because it is tangible (unlike a digital wallet) and is accepted anywhere, which is important for functioning in local market economies.              | Digital financial services allow people to manage their money, better control how they use their funds, save for unpredictable needs such as health and emergencies, and invest in business opportunities and in their household |
-| Cash can be cheaper because the ecosystem around it is mature versus a still growing digital systems, where players in the value chain are still looking for ways to get paid.  | Although cash is tangible and can be held in your hand, cash can be stolen or kickbacks required without a trace, which increases risks for people who use cash. |
+| Cash can be cheaper because the ecosystem around it is mature versus a still-growing digital system, where players in the value chain are still looking for ways to get paid.  | Although cash is tangible and can be held in your hand, cash can be stolen or kickbacks required without a trace, which increases risks for people who use cash. |
 | Digital systems take a long time to set up in uncertain environments and the current digital infrastructure does not solve the range of product and service needs – it’s better to reduce complexity, especially in uncertainty.  | Digital financial services provide clients, and women, in particular, greater privacy. |
 | Cash can be easily understood it does not require memorizing passwords, help from an agent, or waiting for ages to talk to a “help desk” when there is a problem.       | Digital services create a financial history over time, and give people pathways to greater inclusion |
@@ Line 424: / Line 432: @@
 </WRAP>|
 ^ D0012 ^ **Design** should address privacy concerns by leveraging existing tools already in use by intermediaries |<WRAP>
-See section [[cbdc:private:cbdc_omg:04_doc:15_common:45_privacy:start]]/
+See section [[cbdc:public:cbdc_omg:04_doc:15_common:45_privacy:start]]/
 </WRAP>|
 ^ D0015 ^ **Design** should include any dedicated infrastructure required to provide a resilience to threats such as operational disruptions and cybersecurity risks |<WRAP>
-See answer to [[cbdc:private:cbdc_omg:04_doc:20_comments:dsn:q18:start]];
+See answer to [[cbdc:public:cbdc_omg:04_doc:20_comments:dsn:q18:start]];
 </WRAP>|
 ^ D0016 ^ **Design** should include offline capabilities to help with operational resilience of the payment system  |<WRAP>
-See answer to [[cbdc:private:cbdc_omg:04_doc:20_comments:dsn:q18:start]];
+See answer to [[cbdc:public:cbdc_omg:04_doc:20_comments:dsn:q18:start]];
 </WRAP>|
 ^ D0017 ^ **Design** should include digital payments in areas suffering from large disruption, such as natural disasters |<WRAP>
-See answer to [[cbdc:private:cbdc_omg:04_doc:20_comments:dsn:q18:start]];
+See answer to [[cbdc:public:cbdc_omg:04_doc:20_comments:dsn:q18:start]];
 </WRAP>|
-| **''B''** = [[cbdc:private:cbdc_omg:04_doc:12_summary:start#benefits| Benefit Considerations ]] |||
+| **''B''** = [[cbdc:public:cbdc_omg:04_doc:12_summary:start#benefits| Benefit Considerations ]] |||
-| **''P''** = [[cbdc:private:cbdc_omg:04_doc:12_summary:start#policy_considerations| Policy Considerations]] |||
+| **''P''** = [[cbdc:public:cbdc_omg:04_doc:12_summary:start#policy_considerations| Policy Considerations]] |||
-| **''R''** = [[cbdc:private:cbdc_omg:04_doc:12_summary:start#risks| Risk Considerations ]] |||
+| **''R''** = [[cbdc:public:cbdc_omg:04_doc:12_summary:start#risks| Risk Considerations ]] |||
-| **''D''** = [[cbdc:private:cbdc_omg:04_doc:12_summary:start#design| Design Considerations]] |||
+| **''D''** = [[cbdc:public:cbdc_omg:04_doc:12_summary:start#design| Design Considerations]] |||
 </table>

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