Six central banks will work together to assess potential cases for central bank digital currencies
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS), have created a group to share experiences as they assess the potential cases for central bank digital currency (CBDC) in their home jurisdictions.
The group will assess CBDC use cases economic, functional and technical design choices, including cross-border interoperability and the sharing of knowledge on emerging technologies. It will closely coordinate with the relevant institutions and forums – in particular, the Financial Stability Board and the Committee on Payments and Market Infrastructures (CPMI).
The group will be co-chaired by Benoît Cœuré, Head of the BIS Innovation Hub, and Jon Cunliffe, Deputy Governor of the Bank of England and Chair of the CPMI. It will include senior representatives of the participating institutions.
Cœuré took over as head of the Innovation Hub, in part, to lead BIS’ efforts in exploring central bank currencies. He previously told reporters in November the ECB was evaluating the future role for CBDCs when he had been a member of the bank’s Executive Board. He has also chaired a G7 working group investigating the global impact of stablecoins.
Although broadly supportive of private initiatives in this area, Cœuré famously referred to bitcoin as “the evil spawn of the financial crisis” in late 2018.
Moreover, although Christine Lagarde, then head of the International Monetary Fund, first called on central banks to begin seriously exploring digital currencies in late 2018, interest in CBDCs only really increased following the Libra announcement last summer. Since then, the prospect of a private currency initiative has accelerated central bank research and development into digital currencies.