Azerbaijan’s central bank is taking a cautious approach to developing a central bank digital currency （CBDC） due to concerns about monetary policy and financial stability.
Points
- Azerbaijan’s central bank is not currently planning to issue a digital currency.
- The bank is evaluating the impact of CBDCs on monetary policy and financial stability.
- No central banks have yet successfully implemented a digital currency.
- The project may be revisited once these concerns are addressed.
Azerbaijan’s central bank has decided to take a cautious approach to the development of a central bank digital currency （CBDC）, citing concerns over monetary policy and financial stability. Central bank governor Taleh Kazimov stated that while the CBDC project is technologically interesting, there are significant questions regarding its impact on monetary policy and the stability of the financial sector.
“We are not currently planning to issue a digital currency,” Kazimov said.
Kazimov elaborated that the central bank is prioritizing a thorough evaluation of the impact of CBDCs on monetary policy and financial stability. He noted that no central banks globally have yet achieved a “successfully implemented” digital currency, with all current initiatives remaining in the pilot phase.
“The project [CBDC] is very interesting from a technological point of view, and we look into it regularly and are monitoring other central banks to see the results that they have achieved, because there are questions about both monetary policy and the stability of the financial sector,” Kazimov added.
Kazimov also mentioned that the central bank does not rule out the possibility of revisiting the matter once it gets answers to these questions.
CBDCs Go Mainstream, But Not Everywhere
As CBDCs gain mainstream attention, many countries are exploring their potential benefits and challenges. However, Azerbaijan’s cautious approach highlights the complexities and uncertainties involved in implementing a national digital currency.