Tuesday, April 13, 2021

Banks for International Settlements calls for cooperation from central banks on CBDCs.

The Takeaway:

The Bank for International Settlements has called on central banks to cooperate on central bank-backed digital currencies in a new document.

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The Bank for International Settlements (BIS) has published a new document on March 31 offering Central Bank Digital Currencies (CBDC) suggestions. Titled “Central Bank Digital Currencies: Putting a Big Idea into Practice,” BIS covers various ideas related to the type of assets. BIS General Manager Agustin Carstens made the remarks during a speech at the Peterson Institute for International Economics (PIIE) in Basel, Switzerland. He noted that banks worldwide are deploying resources into CBDC development, citing China and the US.

 

BIS Innovation Hub is working on multiple projects related to CBDCs.

The General Manager also stated that the BIS’s own Innovation Hub complemented the general interest by working on multiple projects related to CBDCs. Carstens stated, “CBDCs are a technologically advanced representation of central bank money. If well-designed, they could offer a safe, neutral, and final means of settlement for the digital economy.” While counting the benefits of a CBDC, he said users are not subject to credit risks and increased efficiency. He stressed that CBDCs are quite different from cryptocurrencies and stablecoins, which have no connection to central banks.

 

International cooperation is necessary for CBDCs to reach their full potential.

Asking for caution and rationale in implementation, Bank for International Settlements’ general manager believes that international cooperation is necessary for CBDCs to reach their full potential. To that end, he noted, “Globally coordinated CBDC design efforts and CBDC arrangements will also offer a worthy alternative to privately issued stablecoins or cryptocurrencies which are not coordinated internationally with societal objectives in mind.” Banks around the world are rapidly changing their tack on the technology and its innovative potential. Many central banks around the world have already been working on their CBDCs for some time. The People’s Bank of China has been working on its digital yuan for many years, and it is now very close to issuing it to its general public. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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