Consumer protection risk mapping
With each advancement in payment technology, consumers face new opportunities but also new challenges and risks, not all of which are easily perceptible. In the context of stablecoins, some of these challenges are already emerging, such as ambiguity in redemption rights and schemes backing issuance. For central bank digital currency (CBDC), careful consideration of appropriate consumer protections is also warranted, to protect users and support adoption.
This paper sets out a typology of risks to consumers associated with different types of digital currencies and different technology and governance options. It aims to help consumers, consumer-rights advocacy groups and policy-makers to better understand the risks. It also provides high-level principles for the design of effective and coordinated consumer protection policies, and for the identification of accountable parties in stablecoin and CBDC programmes.