The Bank for International Settlements (BIS) is encouraging the establishment of legal frameworks supporting the distribution of central bank digital currencies (CBDCs). BIS President Agustín Carstens announced today his recommendations for jurisdictions discussing policy proposals on this matter.
Central Banks Actively Researching CBDCs
Agustín Carstens emphasized the need for innovative approaches to the development of financial systems today. He noted that central banks are actively researching CBDCs to promote innovation. However, Carstens also highlighted that this transformation cannot be accomplished solely by central banks.
Additionally, Carstens stated that legal frameworks play a critical role in the worldwide development and adoption of CBDCs. He outlined certain essential components that these legal frameworks should incorporate:
User Protection: Ensuring users can keep their digital assets secure and are protected against fraudulent activities.
Financial System Integrity: Legal frameworks should be designed to preserve the integrity of the financial system. CBDCs should support financial stability and mitigate risks within the system.
Preventing Money Laundering: Surveillance mechanisms should be in place to monitor suspicious transactions and prevent money laundering. This aims to prevent the misuse of CBDCs and illegal activities.
Cryptocurrencies and Stablecoins Increasing Demand for Exchange
Carstens also pointed out that the reduced use of cash, coupled with cryptocurrencies and stablecoins, is increasing the demand for “exchange.” However, he emphasized that these digital assets do not have any intrinsic value.
“Even stablecoins do not guarantee a stable value. They cannot meet the standards that people expect from money.”BIS President Agustín Carstens