The Bank for International Settlements (BIS) continues to investigate the development of the digital currencies of the global central banks (CBDCs) and publishes a new joint report with seven central banks.
The BIS’s latest CBDC report, released September 30th, looks at a joint effort to explore a retail CBDC with the Bank of Canada, Bank of England, Bank of Japan, Central Bank of Europe Europe, the US Federal Reserve, the Sveriges Riksbank and the Swiss National Bank.
The report provides a summary of the progress made since the report was published in October 2020, outlining the general fundamentals and key features of CBDCs. The BIS also released three detailed CBDC reports on CBDC system design and interoperability, user demand, adoption impact, and financial stability.
According to the new report, an effective CBDC system would “require the involvement of both public and private actors to ensure interoperability and coexistence with the broader payment system”.
The central banks participating in the report agreed that any CBDC ecosystem would involve the public and private sectors in balance to “achieve desired policy outcomes and enable innovation to meet the growing payment needs of users”. Connectivity between CBDCs and traditional payment systems will be critical to the financial system, the report says:
“One issue that permeates almost all considerations, however, is interoperability. Domestic interoperability will be key to ensuring that the CBDC system coexists with other national payment systems and contributes to wider accessibility, resilience and diversity. “
Related: Visa is working on a blockchain interaction hub for crypto payments
The central bank team will continue to delve deeper into CBDC issues and plans to expand global and national reach to maintain open dialogue and information about CBDCs. “All in all, we share the knowledge we have gained from our work with other central banks, including those in developing countries,” the banks stated.
The central bank’s new report comes as payments giant Visa officially launched its own blockchain interoperability project on Sept. 30, which aims to create a “global adapter”. “Connects several cryptocurrencies, stablecoins and CBDCs. Previously, tech giant Microsoft won a blockchain patent describing a cross-chain system that enables individuals and organizations to create and manage tokens across multiple networks and distributed ledger platforms.