Central bank digital currencies (CBDCs) are an opportunity for central banks to offer a technologically advanced representation of central bank money for the digital economy.
Their introduction will have profound
effects for users, central banks, financial institutions and the
international monetary system. A retail CBDC could address long-standing
and emerging issues in payments. It could increase competition, lower
fees and encourage innovation. CBDCs would be part of an ecosystem with a
range of private sector payment providers, and be designed to enhance
efficiency without impairing central banks' monetary policy and
financial stability mandates and within today's two-tier financial
system. Multi-CBDC arrangements could tackle frictions in today's
correspondent banking systems, such as differences in the opening hours
of payment systems, varying communication standards and a lack of
transparency around exchange rates or fees. Central banks around the
world are collaborating to put this big idea into practice.
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