Mikhail V. Kulakov, Denis I. Pekhalskiy Financial Innovation in Developing Countries: a Catch-Up Development Tool?

DOI: 10.38050/2078-3809-2026-18-3-180-198

Abstract

This article examines the emerging trends in the adoption of financial innovations in developing economies. It highlights the role of these innovations in addressing key development challenges and identifies the principal channels through which their effects may propagate to the broader economy. The analysis shows that mobile money is becoming increasingly widespread across developing countries, where it can foster savings accumulation and is associated with improvements in household welfare. Central bank digital currencies, while not yet widely adopted, appear to hold considerable promise for expanding financial inclusion and for promoting a more level competitive environment in the banking sector. Stablecoins, in turn, may serve as one instrument for cross-border payments, enabling transactions that are cheaper and faster than existing alternatives. At the same time, they are not viewed as a mechanism for dismantling the dollar-centric architecture of the international monetary system; rather, stablecoins are better understood as an instrument for its incremental adaptation and fine-tuning.

Keywords: financial innovation, financial inclusion, mobile money, central bank digital currencies, stablecoins, developing countries.

JEL: E42, E58, F24, F33.

For citation: Kulakov, M.V., Pekhalskiy, D.I. (2026) Financial Innovation in Developing Countries: a Catch-Up Development Tool? Scientific Research of Faculty of Economics. Electronic Journal, vol. 18, no. 3, pp. 180-198. DOI: 10.38050/2078-3809-2026-18-3-180-198.

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