Seven central banks and the Bank for International Settlements (BIS) issued a report highlighting criteria for the central banks to issue digital currencies. Central Banks agreed that digital currencies and cash should coexist.
Although central banks and BIS did not make any commitment for issuing digital currency, this report has set up a criteria for the central bank to issue digital currencies. BIS officials stated in a press release, “central banks to continue investigating CBDC feasibility without committing to issuance.”
The 26 page report published on Friday unveiled foundation principles and core features of central bank digital currencies (CBDCs). The report was compiled by the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, Sveriges Riksbank, the Swiss National Bank and the Bank of International Settlements.
The report stated that digital currency should coexist with cash and other types of money in a flexible and innovative payments system. The report added “any introduction should support wider policy objectives and do no harm to monetary and financial stability.”
Another point the report made was that “features should promote innovation and efficiency.” Sir Jon Cunliffe, Deputy Governor of the Bank of England, termed this report a step forward to understand the need of digital currencies. He said, “the report provides a useful framework for how central bank provide money and support payment systems in an ever-evolving digital world.”
Christine Lagarde, President of the European Central Bank, said central banks have a duty to safeguard people’s trust. She stated “central banks must complement their domestic efforts with close cooperation to guide the exploration of central bank digital currencies to identify reliable principles and encourage innovation.”