No more joking – The Bank for International Settlements wants to launch its digital currency before the end of 2020. Benoît Cœuré, head of the BIS Innovation pole, announced the news on October 25 at the Bund Summit in Shanghai.
An imminent central bank digital currency
Chinese media The Paper was the first to report these statements. The Bund Summit is a non-governmental conference, organized in Shanghai by the China Finance 40 Forum between October 23 and 25.
The BRI, therefore, plans to launch a proof-of-concept of its MNBC / CBDC in the coming months. After having “ taken the cryptocurrency from above ”, the private institution based in Basel strikes back.
The experiments will concern, among others:
- The issuance of a central bank digital currency;
- Its connection with existing payment systems;
- The management of digital identities ;
- The banking supervision and compliance .
Many central banks will be there
The BIS will be supported in its approach by the Swiss National Bank . The partnership between the two institutions dates from October 2019. The digital currency will thus be issued on a blockchain , which “must be improved” according to B. Coeuré. But in the future, other banking institutions should participate in this pilot project. He notably cited the Bank of Thailand , the Monetary Authority of Singapore and that of Hong Kong .
This announcement therefore follows the report on digital currencies released by the BIS and 7 other central banks in early October – the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, the Bank of Sweden and the Swiss National Bank. The 26-page paper describes the fundamentals of an MNBC :
- The coexistence of these digital currencies with cash and other types of currencies in a flexible and innovative payment system;
- Support for broader political objectives , without harming financial stability ;
- Promotion of innovation and efficiency .
According to this report, 80% of the countries of the world have entered the research and development of digital currencies.
According to Benoît Coeuré, China , a leader in this field, has a lot to teach states wishing to follow in its footsteps. He also clarified that this is not a “revolution” that will solve current societal problems. MNBCs will be a better form of currency, supporting a more diverse payments ecosystem.
