Featured Product

    BIS Committees Issue Report Analyzing Central Bank Digital Currencies

    March 12, 2018

    CPMI and the Markets Committee of BIS issued a joint report that provides an initial analysis of the central bank digital currencies (CBDCs). The report offers a high-level overview of the implications of CBDCs in three core central banking areas of payments, monetary policy implementation, and financial stability. The report concludes that each jurisdiction considering the launch of a CBDC should carefully and thoroughly consider the implications before making any decision.

    The analysis of the committees reflects initial thinking in this rapidly evolving area and is a starting point for further discussion and research. The joint report, released ahead of the meeting of the Group of 20 (G20) central bank governors and finance ministers, looks at the following two types of CBDC:

    • A wholesale currency limited to select financial institutions. The report finds that wholesale CBDCs might be useful for payments but more work is needed to assess the full potential. Although a CBDC would not alter the basic mechanics of monetary policy implementation, its transmission could be affected. 
    • A general purpose currency accessible to the public. A general purpose CBDC could have wide-ranging implications for banks and the financial system. Reliance of commercial banks on customer deposits may become less stable, as deposits could more easily take flight to the central bank in times of stress. Besides consequences for financial stability, effects on the efficiency of financial intermediation need to be carefully considered. 

    The report concludes that any steps toward the possible launch of a CBDC should be subject to careful and thorough consideration. Further research on the possible effects on interest rates, the structure of intermediation, financial stability, and financial supervision is warranted. The effects on movements in exchange rates and other asset prices remain largely unknown and also deserve further exploration.

     

    Related Links

    Keywords: International, Banking, PMI, Fintech, CBDC, Digital Currencies, Financial Stability, CPMI, BIS

    Related Articles
    News

    FASB Proposes Taxonomy Changes Related to Topics 848 and 470

    FASB proposed taxonomy improvements for the proposed Accounting Standards Update on topic 848 on facilitation of effects of reference rate reform on financial reporting.

    September 16, 2019 WebPage Regulatory News
    News

    BoE Statement on Recalculating Transitional Measures Under Solvency II

    BoE notified that it will be willing to accept applications from firms to recalculate transitional measure on technical provisions (TMTP) as at September 30, 2019.

    September 16, 2019 WebPage Regulatory News
    News

    PRA Publishes Waiver by Consent of Continuity of Access Rules

    PRA published a new waiver by consent to waive the Continuity of Access requirements contained in the Depositor Protection Part of the PRA Rulebook (DPP).

    September 13, 2019 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: Second Update for September 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to three questions.

    September 13, 2019 WebPage Regulatory News
    News

    BoE Paper on Market-Implied Systemic Risk and Shadow Capital Adequacy

    BoE published a working paper that presents a forward-looking approach to measure systemic solvency risk.

    September 13, 2019 WebPage Regulatory News
    News

    HKMA Consults on Policy Module on Pillar 2 Supervisory Review Process

    HKMA is consulting on the revised Supervisory Policy Manual module CA-G-5 that sets out the HKMA approach to conducting the supervisory review process under Pillar 2.

    September 13, 2019 WebPage Regulatory News
    News

    PRA Revises Branch Return and Updates Guidance for Regulatory Reports

    PRA published the policy statement PS17/19, which contains the final policy related to changes in the format and content of the Branch Return Form and reporting guidance.

    September 12, 2019 WebPage Regulatory News
    News

    ESA Report Highlights Risks of No-Deal Brexit in EU Financial System

    ESAs published a Joint Committee report on risks and vulnerabilities in the EU financial system.

    September 12, 2019 WebPage Regulatory News
    News

    ECB Modifies New Targeted Longer-Term Refinancing Operations

    The Governing Council of ECB decided to modify some of the key parameters of the third series of targeted longer-term refinancing operations (TLTRO III) to preserve favorable bank lending conditions (Decision (EU) 2019/1558).

    September 12, 2019 WebPage Regulatory News
    News

    ECB Publishes Version 1.5 of AnaCredit Validation Checks

    ECB published Version 1.5 of the AnaCredit validation checks.

    September 12, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3819