- CBDC’s: The Overarching Goal Behind the Digitisation of Money?
by Steven Guinness, https://stevenguinness2.wordpress.com/
It is no revelation that central banks are actively engaged in both the research and piloting of central bank digital currencies. But the mechanics of how they are conducting their programmes is not as widely recognised. This is largely because the information is buried within the pages of mundane reports, speeches and discussion papers. A few headlines might be glossed over in the financial press, but the technical aspects are usually not considered.
In January 2019 the Bank for International Settlements published a paper called, ‘Proceeding with caution – a survey on central bank digital currency‘. I briefly covered the survey in an article published back in September last year. Back then the BIS reported that a majority of banks were engaged in active research on CBDC’s, but none were yet in a position to launch a digital variant of physical money.
The BIS followed this survey up in January 2020 with some new research – ‘Impending arrival – a sequel to the survey on central bank digital currency‘.
We learn that the 70% of central banks that were researching CBDC’s has now risen to 80%, with many of them reliant on ‘research conducted by international organisations (in particular the BIS and the IMF) or regional networks‘. The BIS’s Innovation Hub initiative, established in the summer of 2019, has been key in coordinating the advancement of CBDC’s projects worldwide. This is one of the reasons why banks are operating in step with one another.
As the survey points out, ‘collaboration through international vehicles such as the BIS Innovation Hub will be necessary to avoid any unforeseen international consequences.’ General manager of the BIS, Agustin Carstens, expanded on this in the institution’s quarterly review: