70% of Central Banks are Working on Digital Currencies, No Hurry to Issue Them: BIS

70% of Central Banks are Working on Digital Currencies, No Hurry to Issue Them: BIS

A survey commissioned by the bank of central banks, the Bank of International Settlements, has disclosed that even though Central Bank Digital Currencies (CBDC) are being researched by a big number of reserve banks, the work is mostly conceptual. Consequently, only a handful of them have any intentions of issuing a CBDC in the near future:

Per the survey which was conducted in 2018, about 70% of the central banks indicated that they are already engaged in CBDC work or will be in the near future. This was a slight increase from 2017 when the figure was around 65%. Most of the central banks that are not engaged and wont be engaged in CBDC work hail from tinier jurisdictions or have more urgent priorities.

Wholesale and General Purpose CBDCs

Among the central banks that are engaged in CBDC work, 31% are concentrating on general purpose central bank digital currencies (issued for use by the general public) while 13% are focusing on wholesale central bank digital currencies (issued for wholesale settlements such as securities settlement and interbank payments). On the other hand, around 56% are working on both wholesale and general purpose CBDCS.

How various central banks are approaching CBDC work. Source: BIS

There are varied reasons why the reserve banks are pursuing both general purpose and wholesale CBDCs:

Partnerships and Collaborations

The survey which polled 63 central banks (22 in advanced economies and 41 in emerging market economies) also revealed that reserve banks around the world are collaborating with each other with regards to proofs-of-concept work especially on securities settlement and cross border settlement.

Examples of these collaborations include Project Stella which is being undertaken by the Bank of Japan and the European Central Bank. There is also a joint proof-of-concept project being undertaken by the Bank of Canada, the Bank of England and the Monetary Authority of Singapore.

Regarding the legal authority required to issue a CBDC, nearly 25% of reserve banks indicated that they already possess or are about to get that authority while 40% are unsure. The uncertainty is, however, falling relative to the survey that was conducted in 2017.

Featured image from Shutterstock.


11.01.2019 / 04:00 9
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