Central Banks Produces Joint Document Related to CBDC

Vandana  |  Oct 9, 2020

Central bank digital currencies (CBDC) is currently one of the most talked-about topics across the world. This is the reason why central banks of different countries have come together and produced a detailed document about CBDC. Moreover, the document on central bank digital currencies is considered to be the most in-detail by any central bank. 

There is a group of seven central banks along with the Bank of International Settlements (BIS) who have worked on this report. All the expectations and requirements that need to be there in any CBDC are mentioned in the detailed report. 

Chinese Central Bank Sidelined Itself From the Report

China is currently undergoing different tests to try out its digital asset and is all set to launch its CBDC, Digital Yuan. The nation has completed the Digital Yuan transactions worth around $162 million. Despite this, China’s central banks have chosen to not get involved in this report.

The Bank of England, the Bank of Japan, and the U.S. Federal Reserve were among all the central banks who drafted this document. The document is titled “Central bank digital currencies: foundational principles and core features.” BIS has also mentioned that neither of the government bodies has given their opinion about the launch of the digital currency.

Report Includes Necessary Fundamental Principles Related to CBDC

In this report, all the necessary fundamental principles related to CBDC are included. The central banks do not need to compromise on their monetary and financial stability while issuing the CBDC. Also, CBDC needs to complement the existing form of money along with promoting innovation and efficiency. The step is taken because there have been huge discussions regarding CBDC across the world. It is going to be of great use for all those countries that are planning to launch one.

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