BIS: 70% of Central banks investigated the issue of digital currency.

[Paha87]

A new report by the Bank for international settlements (BIS) showed that 70% of Central banks are conducting research on the issue of the Central Bank's digital currency (CBDC). However, specific implementation plans and motivations vary considerably depending on the context.

BIS is an organization based in Switzerland, which includes 60 Central banks of the world, and today it has devoted a number of important reports to both decentralized cryptocurrencies and CBDC. The latter differ from the former in that they are digital currencies issued by the Central Bank, whose legal tender status depends on state regulation or law.

Digital currencies for different purposes

As indicated in the BIS report, CBDC is classified as "wholesale", i.e. digital tokens with limited access for wholesale settlements, such as interbank payments and securities settlements, and "retail".

The latter category is further subdivided into "General - purpose" and "account - based" - those that are widely available and targeted for retail transactions-or "General-purpose" and "token-based and value-based". Digital cash issued by the Central Bank may be available to the General public, which is similar to retail CBDC-based accounts, but is distributed and transferred in a different way.

The BIS study included data on 63 Central banks around the world, 41 of which are based in emerging market economies (EME), and 22 of them - in advanced economies - together account for almost 80% of the world's population and more than 90% of its economic output. It was found that 70% of them are already involved - or will soon be - in CBDC theoretical studies, reflecting a slight increase in numbers compared to 2017.

Among the banks involved in research CBDC, about half reportedly moved on to experiments and practical work as a proof of concept (an increase of 15% compared with the 2017 year) although many of these studies are purely analytical in nature and did not indicate a specific release plans for the CBDC. Only five Central banks have actually advanced in the implementation of test projects for the CBDC.

Two exceptional countries

The BIS report identifies Sweden and Uruguay as two exclusive jurisdictions in which active consideration of the issue of a General-purpose CBDC as a Supplement to cash is at an advanced stage.

In the case of Sweden, Riksbank has been working on the e-Krona project since the beginning of 2017. According to reports, Sweden is now in the stage of transition to the next stage, which is a test for prepaid, interest-free and traceable e-Krona.

In the case of Uruguay, the country's Central Bank has reportedly already completed a pilot programme for the General-purpose CBDC. With the decrease in cash in circulation, the Central Bank launched the e-Peso pilot program in November 2017, which was mainly based on distributed Ledger technology (DLT). Since the successful completion of the test project in April 2018, the Bank is currently assessing further testing and potential issue of digital currency.

Last November, the head of the International monetary Fund (IMF), Christina Lagarde, called on the international community to consider the CBDC, arguing that they can work to achieve public policy goals such as financial inclusion, consumer security and privacy in payments.

Link to the source of information (Russian) - https://altstake.io/news/bis-70-centralynyh-bankov-issledovali-vypusk-cifrovoy-valyuty