International cooperation is essential for central bank digital currencies to improve cross-border payments

“In the future, national arrangements could become interoperable by means of multiple CBDC (mCBDC) arrangements between central banks. These would mitigate cross-border and cross- currency risks and frictions, while reinforcing the role of central bank money as an anchor for the payment system. The BIS Innovation Hub is collaborating with a number of central banks to establish prototypes and proofs of concepts to explore different uses of wholesale CBDC in a cross- border context.” said Benoît Cœuré, Head of the BIS Innovation Hub.

“The implications of CBDCs, even if only intended for domestic use, will go beyond borders. The macro-financial implications will ultimately depend on several factors such as the level and nature of international adoption – ranging from niche adoption to facilitate remittances in certain corridors to widespread currency substitution. This report offers an early assessment, and a more extensive and dynamic analysis that takes more factors into consideration will be necessary in the future,” said Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department, IMF.

“Faster, cheaper, more transparent and more inclusive cross-border payment services would deliver benefits for citizens, businesses, and economies worldwide, and increase economic growth, international trade, global development and financial inclusion. Central bank digital currencies are a potential pathway to improving international payments, but they bring risks for emerging market and developing economies and require a lot of work on regulatory and policy conditions to be successful. The World Bank welcomes consideration of these complex issues in the G20 and looks forward to informing this discussion,” said Indermit Gill, Vice President Equitable Growth, Finance and Institutions Practice Group, World Bank.

by : on 2021-07-10 02:10:00

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