The Bank of International Settlements is working on a CBDC pilot with Switzerland’s central bank
According to Benoît Cœuré, executive director at the Bank for International Settlements (BIS), a consortium comprising most of the world’s leading central banks, BIS is working on a central bank digitalized (CBDC) pilot with Switzerland’s central bank.
The Bank of International Settlements is studying digital currency – CBDC
In a speech at the Bund Summit, Benoît Cœuré said:
“By the end of this year, we plan to publish our first wholesale CBDC proof-of-concept with the Swiss central bank.”
The CBDC is the central bank’s digital currency held by banks. Theoretically, they should make transactions cheaper and more secure. Central bank digital currencies differ from cryptocurrencies in that they are not decentralized and sometimes not Blockchain-based. But they are equally (loosely) inspired by Bitcoin and distributed ledger technology. And at least about 80% of the world’s leading central banks are considering issuing CBDCs.
Cœuré added:
“Looking ahead, we plan to build on central banks’ experience with [the] cross-border use of CBDC, including with the [Hong Kong Monetary Authority] and the Bank of Thailand, the Monetary Authority of Singapore and with the Swiss National Bank.”
Cœuré believes this work will “pave the way” for retail versions of CBDCs and an opportunity for other central banks to learn more about the design of CBDCs and help figure out how CBDCs will link together.
He added:
“This complex technical work is above all directed to practical solutions, rather than conceptual research of recent years. Through collaboration, we can learn.”
The CBDC will not be a “revolution” and usher in a new era of prosperity, nor will it solve major social problems. Instead, they will be a better form of money that will support a more diverse payment ecosystem and provide a more global public benefit.
Accordingly, in a separate speech at the summit, Tom Mutton, Fintech director of the Bank of England, which is reviewing CBDCs with great interest, called for cooperation:
“Central Banks need to partner with a broad range of stakeholders given the breadth of issues presented by CBDC. We can’t go it alone.”
Read more:
- Russia’s Central Bank Might Pilot Its Own CBDC At The End Of 2021
- The People’s Bank Of China Prohibits Producing Cryptocurrencies That Could Replace The Yuan, Dual Offline Wallet For CBDC Is Ready To Be Tested