Friday , March 29 2024
Home / Mike Norman Economics / BIS on Central bank digital currencies (CBDCs)

BIS on Central bank digital currencies (CBDCs)

Summary:
AbstractCentral bank digital currencies (CBDCs) could ease current frictions in cross-border payments – and particularly so if central banks factor an international dimension into CBDC design from the outset. Based on a survey of 50 central banks in the first quarter of 2021, this paper explores initial thinking on the cross-border use of CBDCs. While most central banks have yet to take a firm decision on issuing a CBDC, the survey responses show a tentative inclination towards allowing use of a future CBDC by tourists and other non-residents domestically. They have a cautious approach to allowing use of a CBDC beyond their own jurisdiction. Concerns about the economic and monetary implications of cross-border CBDC use and about private sector global stablecoins are taken seriously. At

Topics:
Mike Norman considers the following as important:

This could be interesting, too:

Mike Norman writes Rinse and repeat–Truss chaos–the new benchmark — Bill Mitchell

Lars Pålsson Syll writes The man who never wavered — Alan Bates

Joel Eissenberg writes You can’t fool Mother Nature

Bill Haskell writes Grades and learning

Abstract
Central bank digital currencies (CBDCs) could ease current frictions in cross-border payments – and particularly so if central banks factor an international dimension into CBDC design from the outset. Based on a survey of 50 central banks in the first quarter of 2021, this paper explores initial thinking on the cross-border use of CBDCs. While most central banks have yet to take a firm decision on issuing a CBDC, the survey responses show a tentative inclination towards allowing use of a future CBDC by tourists and other non-residents domestically. They have a cautious approach to allowing use of a CBDC beyond their own jurisdiction. Concerns about the economic and monetary implications of cross-border CBDC use and about private sector global stablecoins are taken seriously. At the wholesale level, 28% of surveyed central banks are considering options to make CBDCs interoperable by forming multi-CBDC arrangements. This involves arrangements that enhance compatibility, interlink or even integrate multiple CBDCs into a single payments system. Finally, almost 14% of respondents are considering an active role for the central bank in FX conversion.
Keywords: central bank digital currency, CBDC, multi-CBDC arrangements, mCBDC, mCBDC Bridge, cross-border payments, payment systems, central banking, digital currency, stablecoins, remittances.
BIS
CBDCs beyond borders: results from a survey of central banks PDF
Raphael Auer, Codruta Boar, Giulio Cornelli, Jon Frost, Henry Holden and Andreas Wehrli
Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

Leave a Reply

Your email address will not be published. Required fields are marked *