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December 5, 2022
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BIS: CBDC is the future of money Blocksats

The Bank for International Settlements (BIS) now claims that the central bank’s digital currencies (CBDC) may be the future of money. However, certain conditions must be met.

BIS and CBDC

In its new annual report Economic BIS reveals that central banks are in a good position to initiate innovative changes in their current payment infrastructure.

“Technology – in particular in the field of digital currency – opens up possibilities for payment systems. CBDC combine this innovative technology with the proven function of central banks. The choice of central banks consists in using these forces for the common good. They can combine their role as catalysts, supervisors and operators and develop a whole new set of payment arrangements based on digital currencies. “

– notes the institution.

CBDC can be based on blockchain technology, which is also the foundation of cryptocurrencies. They will be created to create digital versions of traditional fiat money. They have also been compared to stablecoins and are designed to enable quick and easy domestic and cross-border transactions possible 24 hours a day.

The report also highlights the pros and cons of taking CBDC in individual countries:

“Such an innovation would provide ordinary users with direct access to central bank money and potentially would be a secure, reliable and widely available settlement instrument – just like cash does today. Benefits should be carefully analyzed for the consequences for the functioning of the financial system, such as the risk of disintegration, including the acceleration of banking operations during load periods [systemów] and potentially greater influence of the central bank on the financial system. “

Better than cash

To succeed, we read further in the BIS report, CBDC must have certain features that make them more attractive than cash.

“The basic elements are trust in the issuing entity, legal tender status, guaranteed real-time operation and wide availability”

– explains the institution.

In addition, BIS indicates that CBDC must be user-friendly, immune to cyber attacks and forgery.

It is known that today the People’s Bank of China is working on the digital yuan, and in addition Italy is open to digital euros.

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