The head of the Bank of International Settlements (BIS) Innovation Hub, Benoît Cœuré, has urged central banks to act now on central bank digital currencies (CBDCs) to compete with initiatives in the private sector, together with cryptocurrencies. “CBDCs will take years to be rolled out, whereas … crypto property are already right here,” he stated.
BIS Says Central Banks Need to Hurry up With CBDCs
Benoît Cœuré, head of the BIS Innovation Hub, talked about central bank digital currencies (CBDCs) at the Eurofi Financial Forum, Ljubljana, Friday. He referred to as on central banks to urgently develop CBDCs to compete with cost initiatives within the non-public sector, together with cryptocurrencies.
“Today, the financial system is shifting under our feet,” he explained. “Big techs are expanding their footprint in retail payments. Stablecoins are knocking on the door, searching for regulatory approval. Decentralized finance (defi) platforms are challenging traditional financial intermediation. All of them include completely different regulatory questions, which want quick and constant solutions.”
Asserting that “CBDC will be part of the answer,” he explained: “A well-designed CBDC will be a safe and neutral means of payment and settlement asset, serving as a common interoperable platform around which the new payment ecosystem can organize.”
The BIS official added: “It’ll allow an open finance structure that’s built-in whereas welcoming competitors and innovation. And it will preserve democratic control of the currency.” He opined:
The time has handed for central banks to get going. We should roll up our sleeves and accelerate our work on the nitty-gritty of CBDC design. CBDCs will take years to be rolled out, whereas stablecoins and cryptoassets are already right here. This makes it much more pressing to begin.
Cœuré explained that the BIS Innovation Hub is helping central banks develop CBDCs. “We have already got six CBDC-related proofs of idea and prototypes being developed in our centres, and extra to return,” he revealed.
Cœuré added: “A CBDC’s goal is ultimately to preserve the best elements of our current systems while still allowing a safe space for tomorrow’s innovation. To take action, central banks need to act whereas the present system remains to be in place – and to behave now.”
According to the Atlantic Council’s CBDC tracker, 81 central banks are currently exploring their own digital currencies. Amongst them, 5 have launched, 14 are being piloted, 16 are underneath growth, and 32 are being researched.
Among the central banks currently studying CBDCs is the European Central Bank (ECB), which recently announced the official launch of a two-year investigation of a digital euro. “As soon as the investigation part has ended, we’ll determine whether or not or to not begin growing a digital euro,” the financial institution stated.
