23 Jun BCBS – Central bank digital currencies announce a new chapter for the monetary system
June 23, 2021 – Issued a section of its annual economic report on central bank digital currencies (CBDCs) saying that these announce a new chapter of opportunity for the monetary system. Moving from concept to practical design, to renew money in a new form for the digital age. Would build on central banks’ traditional roles in the payment system, ensure that payments are final and certain, that there is enough liquidity, and a level playing field.
CBDCs built on trust in the central bank, can further the public interest via technology. Function best in a 2-tier system with customer-facing activities done by banks/PSPs. The most promising design is a CBDC built on a digital identity scheme safeguarding data privacy while protecting against illicit activity and streamlining cross-border payments. Extract from BCBS report also looks at CBDC architecture and how they would fit into financial ecosystem, and international dimension of issuance, cross-border payments. Project Helvetia on the feasibility of integrating tokenized assets and central bank money. Application programming interfaces (APIs) that impose a common format for data exchange, how they could act as a bridge between providers and simplify transactions.
For more information, visit www.bis.org.