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The Bank for International Settlements, which serves as a “bank for central banks,” released its latest paper examining retail central bank digital currencies, as its members “are approaching a point” as to whether or not they should move forward in their CBDC work.

Central banks representing Canada, Europe, Japan, Sweden, Switzerland, England and the US are working to explore CBDCs for retail use.

Retail CBDCs, as opposed to wholesale CBDCs, would be used by the general public. 

The group of central banks first published a paper in October 2020 laying out the principles and on Thursday released a paper called “Central bank digital currencies: ongoing policy perspectives.” 

The Bank for International Settlements, or BIS, supports central banks in part by promoting monetary and financial stability, and is owned by 63 central banks representing 95 percent of the world’s gross domestic product. 

The central banks listed on the report said its jurisdictions are looking into whether there is a need to “ensure ongoing retail access to central bank money at a time of profound, ongoing changes across finance, technology and society.”

“The motivation for introducing a retail CBDC may rest primarily on the role of central bank money as a public good,” they said in the report. “At the same time, the introduction of a CBDC could be an innovative opportunity for the monetary system.”

Some of their members are getting to a point where they are deciding whether or not to move onto the next stage of their CBDC work, the banks said. 

Private innovation may be a must

The seven central banks listed on the report said they see private innovation as an important factor for the long term in creating CBDCs. 

“Legislators and authorities will need to remain engaged as work on CBDC progresses. The development of solutions to some of the outstanding legal issues related to CBDC will largely be a matter of national law and will tend to be highly dependent on policy choices and the design of a CBDC.”