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Six major central banking authorities have teamed up with the Bank for International Settlements (BIS) to look into potential cases for central bank digital currency (CBDC).
Participating central banks include the Bank of Canada (BoC), the Bank of England (BoE), the Bank of Japan (BoJ), the European Central Bank (ECB), the Sveriges Riksbank and the Swiss National Bank (SNB).
According to a press release published by the BoE on Jan. 21:
“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, and include senior representatives of the participating institutions.
CBDC initiatives at participating central banks
Central banks and monetary authorities around the globe are increasingly exploring CBDCs. They are also teaming up with private sector companies and startups on these projects.
Last month, the ECB published a paper “Exploring anonymity in central bank digital currencies,” which detailed a CBDC proof-of-concept (PoC), called “EUROchain,” established by the European System of Central Banks (ESCB) under the coordination of the central bank itself. The PoC has been developed in cooperation with Accenture and R3 with the IT infrastructure built on the functionalities of the Corda platform.
In October, the SNB said that it was working with SIX Digital Exchange (SDX) to develop a proof of concept to “explore how digital central bank money could be used in the settlement of tokenized assets between market participants.” The research was to be conducted at an innovation hub center set up by the SNB in collaboration with the BIS.
Back in 2018, the BoC, the BoE and the Monetary Authority of Singapore (MAS) jointly assessed alternative models that could enhance cross-border payments and settlements. One of these models focused on the use of wholesale CBDC and its various applications though distributed ledger technology (DLT).
In addition, Riksbank has been involved in its CBDC project “e-krona” for the past couple of years.
Last month, BoJ Governor Haruhiko Kuroda had also revealed that the central bank has been conducting technical and legal research on CBDCs in order to “stand ready when the need for CBDC may arise in the future.”
In August 2018, the UK Financial Conduct Authority (FCA), together with a number of global financial regulators and related organisations, formed the Global Financial Innovation Network (GFIN) with the objective of providing a platform for innovative firms to better interact with regulators and trial cross-border solutions.
