October 28, 2020 | AtoZ Markets – The situation has changed a lot after Agustin Cartens, general manager of the Bank for International Settlements (BIS), warned that “be careful when considering the Central Bank Digital Currency (CBDC)”.
According to Chinese news site The Paper, BIS, known as the central bank for central banks, is currently planning to experiment with central bank digital currencies in collaboration with the Swiss central bank.
PoC will be implemented by the end of the year
A proof-of-concept (PoC) was revealed at the Bund Summit in Shanghai from October 23-25 by Benoit Coeure, head of the BIS Innovation Hub. The PoC will be completed by the end of the year, after which a retail CBDC use case experiment equivalent to cash use will be conducted.
These experiments were reported to include ways to interoperate digital currencies with existing payment systems, the role of digital IDs, and compliance checks.
These use cases will require further efforts by the blockchain, which is the foundation of the Central Bank Digital Currency, Mr. Coeure said.
BIS expanded CBDC experiment plan
BIS will also investigate ways to promote cross-border payments using digital currencies among central banks, including the Hong Kong Monetary Authority and the Bank of Thailand.
BIS is already experimenting in Singapore, Switzerland, and Hong Kong, with plans to expand to Germany, France, the United Kingdom, Sweden, and Canada, Coeure said.
Just before this comment by Mr. Coeure, who was the managing director of the European Central Bank (ECB) until last year, BIS and seven central banks released a report outlining the basic principles of each country’s digital currency. ..
Many central banks say they are in the process of evaluating the Central Bank Digital Currency, but there seems to be a big move towards issuing CBDC in the coming years. According to ECB leaders, the issuance of a digital euro is very likely and CBDC experiments are planned in Russia, South Korea, and Japan.
China is actively engaged in research and development of central bank digital currencies. Issuance of “Digital RMB” seems to have reached the final stage. The Bahamas also issued the central bank digital currency “sand dollar” last week.
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