Cooperation between public and private sectors would be vital for a global CBDC system, says a new joint report.
The Bank for International Settlements (BIS) continues investigating the development of the global central bank digital currency (CBDC), publishing a new joint report with seven central banks.
Released on Thursday, BIS’ latest CBDC report refers to joint efforts with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the United States Federal Reserve, Sveriges Riksbank and the Swiss National Bank to explore a retail CBDC.
The report provides an executive summary of progress made by the investigation since the October 2020 publication of a report that pointed out the common foundational principles and core features of a CBDC. The BIS also published three detailed CBDC reports related to CBDC system design and interoperability, user needs, adoption and financial stability implications.
According to the new report, an effective CBDC system would “need to involve both public and private actors to ensure interoperability and coexistence with the broader payment system.”
The central banks participating in the report agreed that any CBDC ecosystem would involve the public and private sectors in a balance to provide “desired policy outcome and enable innovation that meets users’ evolving payment needs.” The ability to bridge between CBDCs and traditional payment systems would be crucial for the financial system, the report stated:
“Yet a theme that cuts through almost every consideration is interoperability. Domestic interoperability would be key to ensuring a CBDC system coexists with other national payment systems and contributes to broader accessibility, resilience and diversity.”
Related: Visa working on blockchain interoperability hub for crypto payments
The central bank group will continue to explore CBDC issues and plans to increase global and domestic outreach to maintain an open and informed dialogue on CBDC. “Collectively, we are sharing insights from our work with other central banks, including in developing economies,” the banks noted.
The new joint central bank report comes amid payment giant Visa officially introducing its own blockchain interoperability project on Thursday, aiming to bring a “universal adapter” connecting multiple cryptocurrencies, stablecoins and CBDCs. Previously, tech giant Microsoft won a blockchain patent describing a cross-chain system that allows individuals and organizations to create and manage tokens across multiple distributed ledger networks and platforms.
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