According to the recent trending update, six of the world’s largest Central Banks have collaborated to deliberate on the potential cases for Central Bank Digital Currency (CBDC) in their jurisdictions.
The group of the Central Banks comprises the Bank of England, the Bank of Canada, the Bank of Japan, the European Central Bank, the Sveriges Riksbank, the Swiss National Bank, and the Bank for International Settlements (BIS).
These above-listed central banks will assess CBDC utilities in terms of economic, functional and technical design choices, coupled with cross-border interoperability, which will give room for exchange of knowledge about nascent technologies such as blockchain.
The sudden emergence of private-sector digital currencies, such as Facebook’s Libra and the danger it has on global monetary policy and financial stability prompted this rare initiative.
According to the report, the group will accommodate senior representatives of the Financial Institutions involved and chaired by the head of the BIS Innovation Hub, Benoît Cœuré and the deputy governor of the Bank of England, Jon Cunliffe and chair of the Committee on Payments and Market Infrastructure.
Back in September 2019, former ECB board member Coeure described the emergence of the Facebook’s cryptocurrency Libra as a “wake up call” for Central Banks. He had since foreseen this developing initiative and advised the public authorities in its favor.
He said, “Much in this spirit, the ECB and the Bank of Japan have already joined forces to examine the possible use of distributed ledger technology in financial market infrastructures. The next natural step would be for global central banks to join forces and jointly investigate the feasibility of CBDCs based on common technical standards.”