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

    APRA Decides to Standardize Submission Date for Quarterly Reporting

    APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.

    May 11, 2021 WebPage Regulatory News
    News

    Bundesbank Publishes Supporting Documentation for Reporting by Banks

    Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.

    May 11, 2021 WebPage Regulatory News
    News

    ECB Working Group Publishes Recommendations on EURIBOR Fallbacks

    The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).

    May 11, 2021 WebPage Regulatory News
    News

    EBA Publishes Phase 1 of Reporting Framework 3.1

    EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).

    May 10, 2021 WebPage Regulatory News
    News

    APRA to Finalize Capital Adequacy Standard Revisions by January 2022

    Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA

    May 10, 2021 WebPage Regulatory News
    News

    ESMA Issues Guidelines on Outsourcing to Cloud Service Providers

    ESMA published the final guidelines on outsourcing to cloud service providers.

    May 10, 2021 WebPage Regulatory News
    News

    EBA Publishes Data on Deposit Guarantee Schemes

    EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.

    May 10, 2021 WebPage Regulatory News
    News

    OSFI Sets Out Plan for Future Guidance on Managing Technology Risk

    OSFI has set out the schedule for release of draft guidance on the management of technology risks by federally regulated financial institutions and private pension plans.

    May 10, 2021 WebPage Regulatory News
    News

    MAS Updates Housing Loan Rules, Proposes Corporate Governance Guidance

    MAS updated rules for new housing loans by banks and finance companies.

    May 10, 2021 WebPage Regulatory News
    News

    HKMA Publishes Guideline on Sustainable Finance Grant Scheme

    HKMA published a statement on the 100% Personal Loan Guarantee Scheme and a guideline on the Green and Sustainable Finance Grant Scheme (GSF Grant Scheme) as announced in the 2021-22 Budget.

    May 09, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6959