The Bank for International Settlements (BIS) asks for countries to cooperate at the early stages of central bank digital currency (CBDC) design to make it easier for systems to work across borders.
Each jurisdiction will have its own legal frameworks but many design features for CBDCs – which are digital versions of existing sovereign currencies like the U.S. dollar – are still undecided, allowing central banks to start with a “clean slate,” the BIS’s joint report with the International Monetary Fund and World Bank said on Monday.
The conclusions are inline with that of Cecilia Skingsley, first deputy governor of Sweden’s central bank, and set to become head of the innovation arm at BIS. Two weeks ago she warned of the potential for countries to not “play nicely” with each other with respect to CBDC design.
“To promote coexistence with other forms of money and payment instruments and a reasonable level of adoption of CBDC, interoperability with non-CBDC systems, both domestically and cross-border, is fundamental,” the report said today.
That countries around the globe are looking into establishing a CBDC at least in part in response to the crypto market boom is no secret. The Bahamas was the first to launch a digital currency, named the “sand dollar” in 2020, and China has pushed forward with its trial of the digital yuan.
