The Bank for International Settlements, which acts as a “bank for central banks”, released its latest paper examining retail central bank digital currencies, as its members are “coming to a point” that they should Should the CBDC work go ahead or not?
Central banks representing Canada, Europe, Japan, Sweden, Switzerland, England and the US are working to explore CBDCs for retail use.
Unlike wholesale CBDCs, retail CBDCs will be used by the general public.
The group of central banks first published a paper outlining the principles in October 2020 and on Thursday issued a paper Called “Central Bank Digital Currencies: The Ongoing Policy Perspective”.
The Bank for International Settlements, or BIS, supports central banks by promoting monetary and financial stability, and is owned by 63 central banks representing 95 percent of the world’s GDP.
The central banks listed in the report said its jurisdictions are looking into whether “there is a need to ensure retail access to central bank money at a time of profound, ongoing changes in finance, technology and society.”
“The motivation for introducing a retail CBDC may hinge primarily on the public good role of central bank money,” he said in the report. “Also, the introduction of a CBDC could be an innovative opportunity for the monetary system.”
The banks said some of their members are reaching a point where they are deciding whether to move on to the next phase of their CBDC work.
Private innovation may be necessary
The seven central banks listed in the report said they see private innovation as a key factor in creating CBDCs over the long term.
“Legislators and officials will need to remain engaged as work on CBDCs progresses. The development of solutions to some of the outstanding legal issues related to CBDCs will largely be a matter of national legislation and will be highly dependent on policy choices and the design of CBDCs.
