Central banks need to accelerate their CBDC work in the face of stablecoins, digital assets and the incursion of Big Tech into finance, says the head of the BIS Innovation Hub, Benoît Cœuré.
While most central banks are investigating CBDCs, Cœuré is urging greater urgency, telling the Eurofi Financial Forum in Ljubljana that “the time has passed for central banks to get going. We should roll up our sleeves and accelerate our work on the nitty-gritty of CBDC design.”During his speech, Cœuré addresses the concerns that commercial banks have about CBDCs and their implications for customer deposits. “Central banks are mindful of these concerns and are working on answers. They see banks as part of future CBDC systems,” he says.
Commercial banks should be more worried about the challenge that they face from global stablecoins, DeFi platforms and big tech firms, he warns.
And, while CBDCs will take years to be rolled out, stablecoins and cryptoassets are already here: “This makes it even more urgent to start.”
BIS has been recruiting central banks for several CBDC experiments, most recently launching an investigation into their use for international settlements.
Cœuré says that work on CBDCs should keep in mind three things: why consumers would want one and what they would want it to do; how it would meet public policy objectives; and what technology choices to make.
Concludes Cœuré: “A CBDC’s goal is ultimately to preserve the best elements of our current systems while still allowing a safe space for tomorrow’s innovation. To do so, central banks have to act while the current system is still in place – and to act now.”