The head of the Bank of International Settlements (BIS) innovation hub, Benoît Cœuré, has urged central banks to respond now to central bank digital currencies (CBDCs) to compete with private sector initiatives, including cryptocurrencies. “CBDCs will take years to roll out while … crypto assets are in place,” he said.
BIS says central banks need to hurry with CBDCs
Benoît Cœuré, Head of the BIS Innovation Hub, spoke on Friday at the Eurofi Financial Forum in Ljubljana about digital currencies from central banks (CBDCs). He urged central banks to urgently develop CBDCs to compete with private sector payment initiatives, including cryptocurrencies.
“Today the financial system is shifting under our feet,” he said. “Big techs are expanding their presence in retail payments. Stablecoins are knocking on the door asking for government approval. Decentralized financial platforms (defi) represent a challenge for traditional financial intermediation. They all bring with them different regulatory questions that require quick and consistent answers. “
Claiming that “CBDC will be part of the answer,” he said, “a well-designed CBDC will be a secure and neutral means of payment and settlement and serve as a common interoperable platform around which the new payments ecosystem can organize.”
The BIS official added: “It will enable an open financial architecture that is integrated while welcoming competition and innovation. And it will preserve the democratic control of the currency. ”He said:
The time for the central banks is over. We should roll up our sleeves and speed up our work on the details of the CBDC design. The adoption of CBDCs will take years while stablecoins and cryptoassets are already in place. This makes the start even more urgent.
Cœuré stated that the BIS Innovation Hub is helping central banks develop CBDCs. “We already have six CBDC-related proofs of concept and prototypes being developed in our centers and more will follow,” he said.
Cœuré added, “The ultimate goal of a CBDC is to preserve the best elements of our current systems while providing a safe space for tomorrow’s innovations. To do this, the central banks have to act while the current system is still in place – and act now. “
81 central banks are currently studying their own digital currencies, according to the Atlantic Council’s CBDC tracker. Five of them are at the start, 14 are in the pilot phase, 16 are in development and 32 are in research.
Central banks currently investigating CBDCs include the European Central Bank (ECB), which recently announced the official start of a two-year investigation into a digital euro. “After the research phase is over, we will decide whether or not to start developing a digital euro,” said the bank.
What do you think of the BIS asking central banks to accelerate CBDC development? Let us know in the comments section below.
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