Payment Resilience in Fragile and Conflict-Affected States: Lessons for Central Bank Digital Currency (CBDC) (IMF Fintech)

Summary

• Over 1 billion people currently live in Fragile and Conflict-Affected States, where payment ecosystem disruptions present severe risks to economic stability.p.7
• By 2030, it is estimated that two-thirds of the world's extreme poor will reside in areas affected by fragility and conflict.p.7
• The total global financial impact from cyber incidents more than quadrupled since 2017, reaching $2.5 billion by the end of 2023.p.12
• To strengthen operational resilience under wartime conditions, the National Bank of Ukraine expanded its RTGS system from a three-site to a five-site parallel architecture.p.20
• Ukraine established the Power Banking initiative, linking over 2,400 bank branches across 60 banks to ensure continuous banking services during major power blackouts.p.23
• In Sudan, usage of the Bankak digital banking application increased by 85 percent following the outbreak of armed conflict, reaching approximately 7 million users.p.30

Key insights

1. Satellite networks technology offers high-speed internet and decentralization, enabling alternative communication channels when land- or sea-based links are damaged.p.22
2. Decentralized local power models, such as solar-powered point-of-sale terminals and generators, reduce operational vulnerability to long-distance grid failures.p.23
3. Migrating core functions to cloud environments provides elastic scalability, multi-region geographic redundancy, and operational continuity under physical or cyber threats.p.24
4. Deploying foreign-hosted payment platforms and offshore accounts can enable aid delivery when domestic physical and core banking infrastructures are disrupted.p.26
5. Digital identification frameworks like Ukraine's BankID System facilitate secure remote onboarding and continuous access to services for displaced populations.p.29
6. Establishing specialized cyber response entities like the CSIRT-NBU ensures rapid threat monitoring, incident containment, and cross-sector intelligence sharing.p.35
7. Pre-crisis financial stability and a well-regulated banking sector are essential foundations for sustaining trust and maintaining digital payments during crises.p.35
8. CBDCs designed with offline transaction capabilities can offer a critical digital fallback when electrical grids or internet connectivity suffer extended outages.p.43