Digital Money: The Rise of the Entrepreneurial State

Citi Public Digital Money | The Rise of the Entrepreneurial State | March 2022 15 Citi Public Digital Money | The Rise of the Entrepreneurial State | March 2022 14 With the acceleration of digital money adoption, several new indicators are getting tracked and reported on a regular basis, providing us with an opportunity to strengthen our Digital Money Index with these newer indicators as well as include new countries to the Index. Further, recognizing the importance of governments in advancing digital readiness, Citi and Imperial College London have revamped the DMI to give the government and market support pillar more importance. More information on the index construction can be found in the methodology section in the Appendix. The updated index assesses digital money readiness in 113 countries, up from 84 countries in the previous iteration. The index continues The revamped Digital Money Index 2022 Conclusion to classify countries into 4 clusters — Incipient, Emerging, In-transition and Materially Ready — according to their levels of digital readiness. Digital Money Index 2022 has 22 countries in the materially ready cluster, 27 countries in In-transition cluster, 45 in Emerging, and 19 countries in Incipient cluster. The revamped Index, with the addition of new indicators, acknowledges the progress made by several developing economies in driving digital money readiness with several of these countries entering the materially ready and in-transition clusters, to be classified on par with several developed economies and well ahead of their emerging market peers. A holistic digital policy is required to promote digital money readiness and adoption. Countries that have augmented a holistic digital policy with targeted investments have performed well on digital money readiness as measured by our Digital Money Index. This is evident from the case studies of Malaysia, the United Arab Emirates, Estonia, and Uruguay that have all outperformed their peers. Citi’s holistic digital policy research report 21 released in November 2021 articulates how a holistic digital policy combined with focused investments can drive not just digital readiness, but also overall economic growth. The need for a holistic digital policy, targeted investments, and collaboration across all economic stakeholders to drive progress are very clear. The time to act is now. Figure 4: Digital Money Index 2022: Country classification Endnotes 1 World Economic Forum, Shaping the Future of Digital Economy and New Value Creation. https://www. weforum.org/platforms/shaping-the-future-of-digital- economy-and-new-value-creation#:~:text=An%20 estimated%2070%25%20of%20new,remain%20 unconnected%20to%20the%20internet. 2 Business Standard, Deposits in bank accounts opened under Jan Dhan scheme cross Rs 1.5 trn, 2022. https:// www.business-standard.com/article/current-affairs/ deposits-in-bank-accounts-opened-under-jan-dhan-scheme- cross-rs-1-5-trn-122010900345_1.html#:~:text=As%20 per%20the%20data%2C%2029.54,crore%20 PMJDY%20accounts%20were%20opened. 3 McKinsey, Digital identification: A key to inclusive growth, 2019. https://www.mckinsey.com/business- functions/mckinsey-digital/our-insights/digital- identification-a-key-to-inclusive-growth 4 Juniper, Blockchain to Facilitate $10 Billion Savings Globally in Cross-border Payments, as Operational Efficiencies Take Effect, 2021. https://www.businesswire.com/news/ home/20211107005028/en/Juniper-Research-Blockchain- to-Facilitate-10-Billion-Savings-Globally-in-Cross-border- Payments-as-Operational-Efficiencies-Take-Effect 5 Emerging Technologies: Disrupting Economies, Business Models and Opening Avenues for Economic Growth and Sustainability. https://icg.citi.com/rcs/icgPublic/ storage/public/gra34788-Emerging-Technologies- Whitepaper-v7-Single.pdf 6 FIS Global, Real-time payments in 2021: Adoption in five regions, 2021. https://www.fisglobal.com/en/insights/ what-we-think/2021/june/real-time-payments-in-2021- adoption-in-five-regions 7 CGAP, Open Banking: How to design for Financial Inclusion, 2020. https://www.cgap.org/sites/default/files/ publications/2020_10_Working_Paper_Open_Banking.pdf 8 Atlantic Council, Central Bank Digital Currency Tracker. https://www.atlanticcouncil.org/cbdctracker/ 9 Harvard Business Review, What If Central Banks Issued Digital Currency, 2021. https://hbr.org/2021/10/what-if- central-banks-issued-digital-currency 10 Forbes, COVID-19 Will Be Remembered As The ‘Great Accelerator’ Of Digital Transformation, 2020. https:// www.forbes.com/sites/davidarmano/2020/09/09/ covid-19-will-be-remembered-as-the-great-accelerator- of-digital-transformation/ 11 Citi, Holistic Digital Policy: Nation States Must Lead in Building Equitable Human-Centric Digital Economies, 2021. https://www.citivelocity.com/citigps/holistic-digital-policy/ 12 Malaysia Digital Economy Corporation, Malaysia Builds Strong Investment Momentum in Digital And Tech Sector, 2021. https://mdec.my/news/malaysia-builds-strong- investment-momentum-in-digital-and-tech-sector/ 13 ZD NET, Malaysia to get high speed broadband, 2007. https://www.zdnet.com/article/malaysia-to-get-high- speed-broadband/ 14 I3 Investor, Finance Minister Has Increased Allocation For NFCP Fiberization From RM21.6 Billion to a Whopping RM50.3 Billions, 2019. https://klse.i3investor.com/web/ blog/detail/www.eaglevisioninvest.com/2019-12-01-story- h1481020899-FINANCE_MINISTER_HAS_INCREASED_ ALLOCATION_FOR_NFCP_FIBERISATION_FROM_RM 15 CIO Tech Asia, Malaysia’s digital transformation aims for five year strategy on digital economy, 2021. https:// ciotechasia.com/malaysias-digital-transformation-aims- for-five-year-strategy-on-digital-economy/ 16 CIO Tech Asia, Malaysia’s digital transformation aims for five year strategy on digital economy, 2021. https:// ciotechasia.com/malaysias-digital-transformation-aims- for-five-year-strategy-on-digital-economy/ 17 Digital Dubai, Smart Dubai celebrates 5 Years of Accomplishments and Successes, 2020. https:// www.digitaldubai.ae/newsroom/news/smart-dubai- celebrates-5-years-of-accomplishments-and-successes 18 Acca Global, Dubai’s smart city project looks to spread happiness, 2019. https://www.accaglobal.com/in/ en/member/member/accounting-business/2019/06/ insights/smart-city.html 19 CNBC, How a tiny country bordering Russia became one of the most tech-savvy societies in the world, 2019. https://www.cnbc.com/2019/02/08/how-estonia- became-a-digital-society.html 20 Enterprise Estonia, Estonia — a European and global leader in the digitalisation of public services, 2021. https://e- estonia.com/estonia-a-european-and-global-leader-in- the-digitalisation-of-public-services/#:~:text=Estonia%20 plans%20to%20advance%20the,will%20be%20 EUR%2097.43%20million. 21 Holistic Digital Policy: Nation States Must Lead in Building Equitable Human-Centric Digital Economies. https://www. citivelocity.com/citigps/holistic-digital-policy/ Incipient Emerging In Transition Materially Ready