Central Bank Digital Currencies and Cross-Border Digital Payments: A Systematic Review in a Fragmented Global Financial Environment

Abstract

Amid rising geopolitical fragmentation and growing uncertainty in global financial systems, Central Bank Digital Currencies (CBDCs) are increasingly viewed as a potential innovation in cross-border digital payments. This paper provides a systematic review of the literature on CBDCs, with a particular focus on their role in cross-border payment systems, while also considering broader implications for monetary power and geopolitical realignment. Using a PRISMA-based review approach, complemented by bibliometric mapping, the study synthesizes existing research across economic, technological, institutional, and geopolitical dimensions. Unlike prior studies that primarily examine technical design features or domestic monetary implications, this review develops an integrated framework that situates CBDCs within the evolving architecture of cross-border digital payment systems in a fragmented global environment. The evidence suggests that CBDCs can enhance cross-border payment efficiency by reducing transaction costs, shortening settlement times, and enabling more direct transfer mechanisms that bypass traditional correspondent banking networks. At the same time, the literature highlights several critical challenges, including interoperability constraints, regulatory divergence, privacy concerns, and cybersecurity risks. Importantly, the findings also point to the potential emergence of parallel digital currency ecosystems, which may reinforce existing financial fragmentation rather than fully resolve it. Overall, CBDCs should be understood not only as technological innovations in digital payments but also as strategic instruments with implications for monetary sovereignty and global economic influence. Their long-term impact on cross-border payment systems will depend on the development of interoperable standards, coordinated regulatory frameworks, and sustained international cooperation. By bringing together fragmented strands of research, this study contributes to a more comprehensive understanding of how CBDCs are reshaping both digital payment infrastructures and the broader global financial order.