Featured Product

    RBI Allows Use of Ratings from New CRISIL Entity Under Basel Rules

    January 27, 2021

    BIS published a report that presents the results of a survey among more than 60 central banks in late 2020 about their engagement in central bank digital currency (CBDC) work, their motivations, and their intentions regarding CBDC issuance. The central banks also provided their views on the legal framework for CBDC and their assessment of the use of cryptocurrencies and stablecoins in their jurisdictions. The survey revealed that central banks are progressing from conceptual research to practical experimentation. Although most central banks do not have plans to launch digital currencies in the foreseeable future, central banks collectively representing a fifth of the world's population are likely to launch retail CBDCs in the next three years.

    The survey showed that nearly 86% of the central banks are exploring the benefits and drawbacks of CBDCs. About 60% of the central banks indicated that the crisis has not changed their priority or preference for issuing a CBDC. For the central banks that have altered their stance on CBDC due to the COVID-19 crisis, main reasons are the goal of enabling access to central bank money during times of emergency and the use of CBDC as a potential complement to cash and in-person payment methods when social distancing is required. The notion of using CBDC as a means of government-to person payment, notably direct fiscal assistance or stimulus to households and small businesses, has been also widely shared. Globally, interest in CBDCs continues to be shaped by local circumstances. In emerging market and developing economies, where central banks report relatively stronger motivation, financial inclusion and payments efficiency objectives drive general purpose CBDC work. A testament to these motives is the launch of a first “live” CBDC in the Bahamas. This front-runner is likely to be joined by others. 

    Despite these developments, the results show that a widespread roll out of CBDCs still seems some way off. Interest and work on CBDCs is global, but motivations for their potential issuance are shaped by local circumstances. Financial inclusion remains a key motivation across emerging market and developing economies and a top priority for CBDC development. In advanced economies, the perceived need for issuance is generally lower and the main areas of interest are related to the efficiency and safety of payments. International policy coordination on CBDCs is set to intensify over the coming years, as central banks thoroughly review the cross-border and economic implications of issuing digital currencies and technical design choices and operational complexities continue to present practical challenges. When it comes to cryptocurrencies, central banks continue to see these as niche products with no widespread use as a means of payment. Conversely, developments in stablecoins are being closely watched, given their potential for rapid adoption by consumers.

     

    Related Links

    Keywords: International, Banking, CBDC, Fintech, Regtech, Digital Currency, Stablecoins, Cryptocurrencies, BIS

    Featured Experts
    Related Articles
    News

    OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities

    The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.

    May 17, 2022 WebPage Regulatory News
    News

    EBA Proposes Standards to Support Secondary NPL Markets

    The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.

    May 17, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).

    May 13, 2022 WebPage Regulatory News
    News

    EBA Issues Standards for Crowdfunding Service Providers Under ECSPR

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.

    May 13, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.

    May 12, 2022 WebPage Regulatory News
    News

    EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA

    The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.

    May 11, 2022 WebPage Regulatory News
    News

    EC Mandates ESAs to Propose Amendments to SFDR Technical Standards

    The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.

    May 11, 2022 WebPage Regulatory News
    News

    EBA Examines Supervisory Practices, Issues Deposits Reporting Template

    The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),

    May 11, 2022 WebPage Regulatory News
    News

    SNB Updates NSFR Forms and FINMA Consults on Operational Risk Circular

    The Swiss National Bank (SNB) published Version 1.2 of the reporting forms (NSFR_G and NSFR_P) on the net stable funding ratio (NSFR) of banks, along with the associated documentation.

    May 10, 2022 WebPage Regulatory News
    News

    US Agency Publications Address Basel, Reporting, and CECL Developments

    The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances

    May 09, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8191