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BIS General Manager Urges Central Banks to Innovate with CBDCs Amid Digital Era Challenges

Algoine News
Summary:
Agustín Carstens, General Manager of the Bank for International Settlements (BIS), emphasizes the need for central banks to lead innovation in the digital age, specifically through the adoption of central bank digital currencies (CBDCs). He discusses potential challenges such as diverse technology infrastructures, cyber threats, privacy issues, and criminal activities. Carstens confirms BIS' support through its Innovation Hub and Cyber Resilience Coordination Centre, highlighting its various ongoing digital economy projects.
Agustín Carstens, the General Manager of the Bank for International Settlements (BIS), stated that it's crucial for central banks to remain innovative and forward-thinking in the digital era. Speaking at a conference in Basel on November 8, he identified central bank digital currencies (CBDCs) as the primary focus of such innovation. Carstens also discussed potential obstacles and risks associated with implementing these currencies. These include the diversification of technology infrastructures that various countries plan to use for their CBDCs, along with heightened cyber threats and opportunities for illicit activities by unethical participants. The precedence for adapting CBDCs to handle these potential threats, according to Carstens, lies in the adaptability of its design. But, he urged caution around potential privacy issues, stating that a balance between privacy and the public acceptance of retail CBDCs is crucial. Carstens confirmed BIS' commitment to aiding central banks in their digital transformation endeavors. This support is particularly coming through the BIS Innovation Hub and the Cyber Resilience Coordination Centre. The BIS Innovation Hub has been notably active, working on numerous digital economy-related projects. The Hub has been assisting the Swiss National Bank in creating a wholesale CBDC, developing a unified platform with the central banks of China, Hong Kong, Thailand, and the United Arab Emirates, and creating a transactions tracker proof-of-concept with the European Central Bank, among other initiatives. However, this report does not cover all the activities being undertaken by the BIS.

Published At

11/8/2023 11:12:00 AM

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