The Bank of International Settlements’ Innovation Hub is looking to take further CBDC developments. The BIS Innovation Hub is developing a proof-of-concept (PoC) platform that explores the use of central bank digital currencies (DBDCs) in cross-border payments.
The BIS, the global financial institution owned by central banks worldwide, has listed CBDCs as one of the six “thematic priorities” for the year 2021. The Proof-of-Concept platform will test will use and test multiple wholesale CBDCs in order to explore the feasibility of cheaper and faster cross-border payments.
The BIS Innovation Hub mentioned that the project shall be developed alongside “a technological research project and associated prototype(s) for tiered retail CBDC distributions architectures”. Benoît Cœuré, BISIH Head said:
“This work programme shows our commitment to exploring in the most practical ways how best to harness technological change for the benefit of central banks and create public goods to support the global financial system. We look forward to taking on the challenges of the year ahead together with our partner central banks”.
Central Banks Accelerating CBDC Developments
Central banks worldwide have been building their digital currency infrastructure to push CBDCs in the market. The involvement of the BIS will help them accelerate this project further and set the pace for other monetary authorities under its purview.
Two weeks back, ECB President Christine Lagarde said that the pan Europe CBDC -Digital Euro – shall be in the market within the next 5 years. While this might seem to be a bit delayed process, Lagarde explained the reason behind this time-frame.
“We are not charging on because it’s an area where we need to be very careful and where we need to have a system that is secure, that is safe, that responds to Europeans demand,” she said.
The ECB President already sees the Digital Euro and a complementary infrastructure to cash and not a replacement.
The newly appointed U.S. Treasury Secretary Janet Yellen is also positive about the digital currency technology and developments. Possibly, the Federal Reserve might accelerate its work on Digital Dollar very soon.