Following a list of central banks from across the world, Bank for International Settlements (BIS) also seems to have acknowledged the importance of a Central Bank Digital Currency (CBDC) as it has revealed its plans for exploring CBDCs. It is the latest one to show interest in using centralized digital currency.
Bank for International Settlements’ Innovation Hub (BISIH) has revealed details regarding its annual work program. As per this program, BIS Innovation Hub has put the research and testing of a Central Bank Digital Currency on the top of its priorities for the current year which means it is going to go in depths of the research of CBDCs.
BISIH’s outlined plans also include the testing of central bank digital currency as it intends to begin various CBDC trials across the entire world sometime in the present year. BISIH is going for this initiative as it intends to use CBDCs for enabling efficient, cheaper, and faster cross-border payments. That is the real reason for which it has included CBDC’s research into its annual work program.
Furthermore, BISIH said that it also wants to issue to retail investors green bonds that are tokenized. And for this purpose, it will be exploring different distributed ledgers along with retail central bank digital currency distribution architectures’ prototypes.
Centres of Innovation Hub present in Switzerland, Singapore, and Hong Kong will be driving this initiative of BIS. The task of the Singaporean BIS Innovation Centre will be to create a settlement platform that will operate internationally. This will be a CBDC settlement platform which will be accessible to all of the payment companies and regulated banks from across the world which can use various CBDCs for settling transactions.
Hong Kong Centre, on the other hand, will be dealing with the project of green bond tokenization and work on it. In addition to this, another task of this centre will be to develop a bridge which will be used for accommodating foreign exchange transactions by utilizing central bank digital currencies.
Commenting on this, the Head of BIS Innovation Hub Benoît Cœuré said that their work program shows how committed they are in the exploration of a variety of practical ways through which they can make use of the technological change for the advantage of worldwide central banks.