Central Bank Digital Currency (CBDC) for small and medium-sized businesses and supply chains: opportunities and challenges
Start date
December 2023End date
December 2024Overview
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.
Team
Principal Investigator
Dr Vahid Mirzabeiki
Senior Lecturer in Operations Management
Biography
Dr. Vahid Mirzabeiki is a Senior Lecturer in Operations Management at the Department of Business Analytics & Operations, Surrey Business School. He also serves as the Research Liaisons Coordinator for the department and is a Sustainability Fellow with the Institute for Sustainability.
Vahid’s research has been published in several world-leading journals, including the International Journal of Operations & Production Management, International Journal of Production Research, International Journal of Production Economics, Journal of Business Research, Production Planning & Control, 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 authored numerous book chapters, articles for industry publications, white papers, and teaching cases. Vahid is a member of the Editorial Review Board of the International Journal of Operations and Production Management and regularly reviews for leading journals in operations and supply chain management. He has secured funding and served as Principal Investigator on several research projects, including those funded by the UK Research and Innovation (UKRI) Economic and Social Research Council (ESRC). Additionally, he has organized and chaired workshops and sessions at prestigious international conferences, including the DSI, EurOMA and POMS annual meetings.
Vahid is the recipient of the Surrey Business School Mid-Career Researcher of the Year Award (2021/22).
Before joining Surrey, Vahid held the position of Senior Research Fellow and Lecturer in Supply Chain Management at Cranfield University School of Management (2013–2018). Between 2018 and 2020, he was a Senior Lecturer in Operations Management and Director of the Executive MBA Apprenticeship Programme at Coventry University Business School, where he played a key role in securing a £0.5 million contract from the Ministry of Justice in the UK.
Vahid holds an MSc and PhD in Supply Chain Management from Chalmers University of Technology in Gothenburg, Sweden. He also holds a Post Graduate Certificate (PGCert) in Academic Practice from Cranfield University. He is a Senior Fellow of the Higher Education Academy (SFHEA) and a Member of the Chartered Management Institute (MCMI).
Through various research and consulting projects, Vahid has worked with leading organizations in Sweden and the UK, including DHL, Volvo, Nestlé, Pladis, GS1, and the Swedish Transport Administration. His research is consistently aligned with practical, real-world challenges in collaboration with innovative organizations.
In addition to his research, Vahid has over fifteen years of experience in advanced teaching and successful module and programme leadership. He has been invited as a guest speaker by leading universities and is a Visiting Lecturer at Bayes Business School (City, University of London). He has also supervised at Trinity College Dublin and served as an External Examiner at Middlesex University Business School. Vahid has served as PhD dissertation external examiner at University of Sussex.
Vahid leads the Supply Chain Design, Planning and Analysis module in the Business Analytics MSc programme at Surrey Business School.
Partner / Co-Investigator
Muhammad Tanoli
Director - Portdex Ltd
Exploring Opportunities
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
- Technical feasibility
- 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.
Planned Impact
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.