Central banks developing national digital currencies (CBDCs) should devote greater attention to their use in cross-border transfers than to domestic applications. These recommendations are contained in a new report by the Bank for International Settlements (BIS).
The impact of #CBDCs, even if domestic, would transcend national borders. Multilateral collaboration on macro-financial issues and technical interoperability is essential, according to a new report by CPMI #BISInnovationHub, @WorldBank and @IMFnews #CBDC https://t.co/gEor9i7D8j pic.twitter.com/jCioIK3HiE
— Bank for International Settlements (@BIS_org) July 9, 2021
The report was prepared jointly with specialists from the World Bank and the International Monetary Fund (IMF).
The authors emphasised that monetary regulators are currently focused on solving domestic tasks, while the implications of issuing a CBDC extend beyond national borders.
In the view of the specialists, proper coordination of CBDC projects across jurisdictions could extend them to cross-border payments.
The report notes that cooperation can take various forms, including common standards to ensure interoperability or the creation of an international payments infrastructure.
Analysts also pointed to the need to ensure interoperability between national CBDCs and existing payment systems. This is driven by differences in the pace of CBDC rollout.
In July, the Bank of France and the Monetary Authority of Singapore successfully completed the experiment for the use of wholesale CBDCs in cross-border payments.
In June, the Bank of France tested the CBDC in cross-border settlements, in collaboration with the Swiss National Bank and BIS Innovation Hub.
In February, the People’s Bank of China and the UAE joined the ‘Bridge’ project for the CBDC of Hong Kong and Thailand.
In December 2020, Hong Kong’s Monetary Authority discussed with the People’s Bank of China the possibility of testing the digital yuan in cross-border payments.
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