Second mover advantage

Treasury - cash management - Central Bank Digital Currencies (CBDCs) - Bank of England.

Second mover advantage means the benefits of risk reduction, from avoiding being the first to implement something new.

Second mover advantage in CBDC development

"[Professor Pinar Ozcan] explained that many CBDC projects around the world are progressing slower than private sector equivalents, she believes this makes it difficult for private sector technology providers to operate in the current CBDC development phases. She believes that many central banks are waiting for a ‘second mover advantage’, as being the first to implement a CBDC could potentially pose higher risks...

One member questioned the benefits of a second mover advantage. When considering wider development patterns in technology, there are often advantages to being the first player to develop a successful product. Pinar noted this was an interesting perspective, but central banks were typically more risk adverse than the private sector. Therefore, central banks may be incentivised to wait to ensure the technology is viable."

Bank of England - Minutes: CBDC Academic Advisory Group – December 2024.

See also

• Barriers to entry
• Central bank
• Central bank digital currency (CBDC)
• Competitor analysis
• First-mover advantage
• Porter
• Private sector
• Product Market Matrix
• Risk averse
• Strategic analysis

Other resource

• Bank of England - Minutes: CBDC Academic Advisory Group – December 2024