A group of major central banks from some of the biggest global economies have released a joint report assessing the feasibility of central bank digital currencies (CBDCs). The seven partnered with the Bank for International Settlements (BIS) on the report, which seeks to offer insight into what is needed for a central bank to roll out a CBDC. The European Central Bank, the Bank of Canada, the Federal Reserve, the Swiss National Bank, Sweden’s Sveriges Riksbank, the Bank of England, and the Bank of Japan all worked together to compile and publish the report.
“CBDC’s ability to coexist with cash and other types of money.”
The central banks of these major countries are seeking to identify the principles necessary for any CBDC, to help other central banks around the world to meet their public policy objectives. The report titled “Central bank digital currencies: foundational principles and core features” highlighted three key principles that a central bank must adhere to as it develops a CBDC. They are a CBDC’s ability to coexist with cash and other types of money, promotion of innovation and efficiency, and support for wider policy objectives while doing no harm to monetary and financial stability.
Central banks around the world continue to explore CBDCs.
The deputy governor of the Bank of England and the group’s co-chair, Sir Jon Cunliffe, said that this report is a real step forward for this group of central banks to agree on the common principles and identify the key features they believe would be needed for a workable CBDC system. Currently, many central banks around the world are exploring central bank digital currencies actively. The People’s Bank of China is all set to issue the digital yuan to the general public. China would become the first major nation in the world to issue a CBDC.