The Bank for International Settlements (BIS) has published a new joint report stating cooperation between public and private sectors would be vital for a functioning global CBDC system.
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the United States Federal Reserve, Sveriges Riksbank, and the Swiss National Bank collaborated on the current CBDC report, which was released on September 30.
The paper summarizes study progress since a report was published in October 2020 that identified common underlying ideas and core components of a CBDC.
Three extensive CBDC reports were also released by the BIS, covering CBDC system architecture and interoperability, user demands, adoption, and financial stability concerns.
A successful CBDC system, according to the latest paper, “must incorporate both public and private players to ensure interoperability and compatibility with the broader payment system.”
The central banks who took part in the paper agreed that any CBDC ecosystem would require a balance between public and private sectors to achieve the “desired policy outcome and enable innovation that satisfies consumers’ evolving payment demands.” According to the research, the capacity to integrate CBDCs and traditional payment methods is critical for the financial system:
“Yet a theme that cuts through almost every consideration is interoperability. Domestic interoperability would be key to ensuring a CBDC system coexists with other national payment systems and contributes to broader accessibility, resilience and diversity.”
The central bank group will continue to investigate CBDC issues, with plans to expand global and local outreach in order to maintain an open and educated conversation about CBDC. The banks stated, “We are collectively sharing insights from our work with other central banks, notably in developing economies.”
The new joint central bank study comes as Visa unveiled its own blockchain interoperability initiative on Sept. 30, intending to create a “universal adapter” that will connect numerous cryptocurrencies, stablecoins, and CBDCs.
Microsoft previously received a patent for a cross-chain system that allows individuals and businesses to create and manage tokens across numerous distributed ledger networks and platforms.