Central banks and BIS explore possible design of central bank digital currencies
News Today the Bank for International Settlement, BIS, is publishing three new reports on central bank digital currencies, CBDCs. These reports, which have been produced together with seven central banks, the Bank of Canada, the Bank of England, the Bank of Japan, the ECB, the Federal Reserve, the Swiss National Bank and the Riksbank, take up practical issues regarding CBDCs, such as various technical design solutions, user needs and questions regarding financial stability.
“Central banks have a responsibility to ensure that citizens have access to the safest form of money – central bank money – in the digital age. These reports are evidence that policy makers are enhancing their domestic projects with international cooperation, sharing ideas on the best technological innovations to provide fast, easy and secure means of payment in the 21st century,” said ECB president Christine Lagarde, chair of the group of central bank governors responsible for the report.
The first report focuses on the importance of collaboration between the private and public sectors to achieve smoothly functioning technical solutions for CBDCs and how aspects such as data and integrity should be taken into account. The second report looks at how a CBDC should be designed to best meet the needs of its users. The third report describes the potential effects on financial stability.
“A decline in the use of cash is an international phenomenon and many central banks are now looking at how their role on the payment market will look going forward. It is very positive in our work on the e-krona that these discussions are also held at an international level so that we can exchange experiences as to how our respective central bank currencies may be designed and what effects they will have,” says Cecilia Skingsley, First Deputy Governor of the Riksbank and chair of the working group for the report “CBDC: system design and interoperability”.