The central bank digital currencies (CBDCs) will complement rather than replace fiat money. This is stated in a report by the Bank for International Settlements (BIS).
The organisation stressed the need for alternative means of payment when cash use proves difficult or carries risks.
«Events such as the Covid-19 pandemic underscored the importance of access to a variety of payment methods that should be open and protected against a wide range of risks. Predicting future challenges is difficult, but central banks will continue to explore the long-term potential of CBDCs across a broad spectrum of potential future scenarios», — the document says.
The BIS report aims to foster information and experience sharing among central banks examining CBDCs. The agency notes a number of countries that are already leading in CBDC development: China, Sweden and Canada.
Given China’s advanced technological development, CBDCs of most central banks will resemble the digital yuan. The country is in an active testing phase of the currency, making its experience valuable to all stakeholders.
The report authors anticipate that most CBDCs will be built on a hybrid principle that would allow the private sector to monitor all activity in the network and manage the settlement and payments system.
This week, media outlets citing a Chinese official reported that authorities plan to deploy the digital yuan during the Winter Olympic Games in Beijing, which begin on 4 February 2022.
Earlier, on the balance sheet of the Bahamas Central Bank discovered a digital currency worth $48 000.
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