Central Bank Digital Currency (CBDC) for small and medium-sized businesses and supply chains: opportunities and challenges
A Central Bank Digital Currency (CBDC) is a digital form of a country's national currency issued by its central bank. Unlike cryptocurrencies such as Bitcoin or Ethereum, CBDCs are typically considered legal tender and are directly backed by the government.
Worldwide, central banks, including the Bank of England are exploring ways to offer their citizens a safe and reliable CBDC, because they can be universally accepted and improve financial inclusion by providing a digital, secure, and accessible form of money for individuals who do not yet hold bank accounts.
There are also sizeable benefits to business, which include reduced transaction costs, faster and more efficient cross-border transactions, the ability to implement innovative monetary policy measures, improvements to supply chain data sharing, financial data sharing and invoicing, and increased levels of security.
This ESRC IAA-funded project will explore the opportunities that CBDCs offer to small businesses, and the challenges that need addressing before widespread adoption occurs. These include privacy, security, GDPR, interoperability and the infrastructure of CBDC operating models, and addressing them will require careful planning, collaboration between stakeholders, and ongoing adaptation to the evolving economic and technological landscape.
Dr Vahid Mirzabeiki from the Surrey Business School and partner organisation Portdex, will identify the regulatory frameworks needed, the possibility for interoperability across borders, and the feasibility of CBDC for peer-to-peer money transactions in supply chains between individuals and businesses.
Dr Vahid Mirza Beiki
Senior Lecturer in Operations Management
Dr. Vahid Mirzabeiki is a Senior Lecturer in Operations Management at the Department of Business Analytics & Operations of Surrey Business School. He is also the Research Liaisons Coordinator of the department.
Vahid’s research is published in several world-leading journals, including the International Journal of Operations and Production Management, International Journal of Production Research, International Journal of Production Economics, Journal of Business Research, International Journal of Physical Distribution and Logistics Management, The International Journal of Logistics Management, British Food Journal, and other top scientific and industrial outlets. He has written several book chapters, industrial outlet articles, white papers and published teaching cases. Vahid is a member of the Editorial Review Board of the International Journal of Operations and Production Management and reviews papers for several leading journals of operations and supply chain management. He has secured funding and as Principal Investigator has led several research projects including from the UK Research and Innovation (UK RI) Economic and Social Research Council (ESRC). He has organised and chaired workshops and sessions at prestigious international conferences including EurOMA and POMS annual meetings.
Vahid is the winner of the Surrey Business School Mid-Career Researcher of the Year Award 2021/22.
Prior to joining Surrey, for five years (2013-2018) he held the positions of Senior Research Fellow and Lecturer in Supply Chain Management at Cranfield University School of Management. Between 2018-2020 he worked as a Senior Lecturer in Operations Management and the Director of the Executive MBA Apprenticeship programme at Coventry University Business School, where he was a key contributor to winning a £0.5 million contract from the Ministry of Justice of the United Kingdom.
Vahid has received his MSc and PhD in supply chain management from Chalmers University of Technology in Gothenburg, Sweden. He has received his Post Graduate Certificate (PGCert) in Academic Practice from Cranfield University. Vahid is a Senior Fellow of Higher Education Academy (SFHEA) and a Member of Chartered Management Institute (MCMI).
Through several research and consulting projects, he has worked with leading organisations in Sweden and the UK, including DHL, Volvo, Nestlé, Pladis, GS1, and Swedish Transport Administration. He is constantly involved in very practically-relevant research in collaboration with innovative organisations.
Besides research, authorship, consultancy and company advising, he has more than fourteen years of experience in advanced teaching and module and programme leadership. Vahid has been invited by leading universities as a guest speaker. He is a Visiting Lecturer at Bayes Business School (City, University of London), and he has had supervision roles at Trinity College Dublin. He is External Examiner at Middlesex University Business School.
Vahid is leading the Supply Chain Design, Planning and Analysis module in the Business Analytics MSc programme at Surrey Business School.
Partner / Co-Investigator
Director - Portdex Ltd
A feasibility study conducted through the project will enable the supply chain finance industry to gain a better understanding of the potential benefits and risks of using CBDC.
How can CBDC be used to reduce transaction costs and improve cash flow for SMEs in supply chain finance?
What new business opportunities could CBDC create for SMEs supply chains?
How can CBDC be used to comply with existing regulations for supply chain finance?
What technical challenges need to be addressed in order to implement CBDC for SMEs supply chain finance?
How likely are SMEs to adopt CBDC for supply chain finance?
Studying the CBDC and cases of pilots based on using it
Contacting SMEs to join the study
Conducting interviews and focus groups with stakeholders including SMEs, Portdex, Central Bank of England and De La Rue
The team will create reports on;
Supply chain finance
Organisational study and testing of systems
These will pave the way towards gaining the knowledge needed to create a CBDC based peer-to-peer transaction network.
The aim of this ESRC IAA-funded project is to provide a careful business analysis and feasibility study for CBDC uptake, prior to developing a network for peer-to-peer digital currency transactions, while digital currency is being created by the central banks and digital transactions are becoming regulated.
The outputs of the project - a series of detailed reports - will be shared widely with central banks, stakeholders, policymakers and parliamentary groups, and will contribute to the advancement of digital currency initiatives worldwide.
The team hopes ESRC IAA funding will lead to wider investment in this area of work and achieve widespread change in the approach to CBDCs for the benefit of financial organisations, businesses and ultimately the consumer.