Central banks on CBDCs beyond borders
Will future central bank digital currencies (CBDCs) transcend national borders – potentially easing current frictions in cross-border payments – or are they likely to remain strictly local? A survey of 50 central banks in the first quarter of 2021 by the Bank for International Settlements (BIS) explored banks’ early thinking on cross-border use of CBDCs, and to what extent this is likely to be built into their design – with evident regulatory implications.
It found that, “while most central banks have yet to take a firm decision on issuing a CBDC, the survey responses show a tentative inclination towards allowing use of a future CBDC by tourists and other non-residents domestically. They have a cautious approach to allowing use of a CBDC beyond their own jurisdiction. Concerns about the economic and monetary implications of cross-border CBDC use and about private sector global stablecoins are taken seriously.” Currently, 28% of central banks are considering options to make CBDCs interoperable by forming multi-CBDC arrangements that enhance compatibility, interlink or even integrate multiple CBDCs into a single payments system.
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