Central Banks get together to discuss CBDCs

Karthik Subramanian

Eight Central Banks from around the world, have got together to discuss building a consensus surrounding the central bank digital currencies which have been dominating the monetary policy meeting of many countries over the last few months.

Who could access the central bank ledger?

The Bank of Canada, BOE, BIS, ECB, Bank of Japan, Swiss National Bank, Sveriges Riksbank, and Federal Reserve were the participants in the consensus meeting post which they released a series of reports on the policies and strategies behind CBDCs, how they can be implemented, how they can be regulated and monitored as well as what kind of impact that they are likely to have on the financial ecosystem. This follows the news from yesterday where it was reported that the BOE was in consultation with a couple of working bodies in the Technology Forum and Engagement Forum regarding CBDCs.

Benoît Cœuré, head of the BIS Innovation Hub and working group co-chair, said: “CBDCs can foster innovation and preserve the best elements of the current system as it evolves. This group is helping central banks to answer difficult and practical questions about how to offer safe and neutral currency with interoperable systems that harness new technology and serve the public.”

Though none of these banks have given any indication that they would be introducing CBDCs anytime soon, it is important to study their interoperability if and when they do launch it as it would need a coordinated effort. Though there are some countries like Nigeria that have gone ahead with the introduction of CBDCs, it would still require the users to convert them back into fiat for payments made across borders as the current payment systems across the world do not fully support digital currencies. This is likely to make users reluctant to use CBDCs in the long run and so it becomes important that different countries cooperate to get this up and running, if they do plan to do so, rather than trying to go it alone.

It also needs to be made sure that they study the impact on the existing financial ecosystem and this study has been issued in one of the reports given outpost the meeting. The reports also included how the CBDCs would best help the people and businesses along with a study of the impact from similar such innovations earlier.

Read this next

Retail FX

BaFin warns that StakeFX Markets is clone broker of BaFin-regulated broker Stak FX

Users should always check the registration of any firm they are interested in working with by visiting the local regulator website’s broker check page.

Digital Assets

FTSE Russell launches multi asset index series covering digital asset market

“FTSE Russell has taken a measured approach to this frontier investment space and has built a rigorous and transparent framework, underpinned by robust governance and comprehensive data to meet investor needs, both where they are now and as they prepare for change in this market.”

Technology

Sell-side analysts spend +30h/week manually closing/investigating alerts, says study

An independent report by Acuiti, and commissioned by Eventus, has found that the increasing complexity of trade surveillance requirements, driven by regulatory demands and exacerbated by volatility, is putting pressure on manual processes and driving investment in automation. 

Digital Assets

Silvergate dismisses speculation of trouble, says BlockFi exposure is minimal

Crypto-friendly bank Silvergate Capital claimed on a Tuesday blog post that it had minimal exposure to crypto lender BlockFi, which filed for chapter 11 bankruptcy protection this week.

Retail FX

Fidelity launches crypto trading for retail investors

Fidelity Investments, one of the largest brokerages in the world, has officially rolled out a commission-free crypto trading product for retail investors, starting with zero-fee trading for Bitcoin and Ethereum.

Digital Assets

ECB head calls for tougher crypto regulation after FTX collapse

President of the European Central Bank, Christine Lagarde, has called on lawmakers to start working on fresh crypto regulations to protect the financial system after the collapse of the FTX exchange.

Retail FX

CySEC updates rules for regulated brokers’ cross border activity

As CySEC’s attitude of adopting more stringent licensing guidelines and operating regulations becomes ever clearer, certain aspects of the rules and operations start to come into sharper focus.

Market News

Outlook for Gold: Can the Precious Metal Regain Power?

Gold set an all-time high at $2070 on March 08, 2022, when the price skyrocketed amid investors’ worries about the military conflict in Eastern Europe.

Crypto Insider

2022 Islamic Finance recap: as the space continues to evolve, blockchain stands to play a big part

Despite the global economy being ravaged by turmoil induced by the Covid-19 pandemic over the last couple of years, the Islamic finance industry has emerged relatively unscathed

<