The Bank for International Settlements (BIS) and the central bank of Switzerland Swiss National Bank (SNB) are considering testing Central Bank Digital Currency (CBDC) before the year 2020 ends. According to a report by the local Chinese media outlet The Paper, they intend to issue a centralized digital currency in the Proof-of-Concept (PoC) stage.
In a speech at the second Bund Summit held on Sunday, October 25, 2020, in Shanghai, the Head of the Innovation Center of the Bank for International Settlements (BIS), Benoît Cœuré said that they are planning on releasing the proof-of-concept stage of a central bank digital currency (CBDC) jointly with the Swiss National Bank. They are expected to issue CBDC Proof-of-Concept by the end of the present year.
Coeure said that this will open the way for BIS to make experiments with retail central bank digital currency and its elements such as “connections to existing payment systems, application excuses, digital identity tracks, compliance monitoring, etc.” However, it is crucial for them to “improve the level of blockchain” for this purpose, Coeure added.
Moreover, Coeure revealed plans for developing a cross-border usage of digital currencies. For this purpose, the Bank for International Settlements will collaborate with various other banks such as the Bank of Thailand, the Hong Kong Monetary Authority of China, etc.
BIS along with its seven central banks released a report on Central Bank Digital Currencies (CBDCs) at the beginning of this month. In the report, they revealed that 80 percent of countries from across the whole world is currently involved in the research and development of central bank digital currencies. Some of them have even reached the testing stage of this centralized digital currency. This shows how rapidly the world is advancing towards acknowledging central bank digital currency.
Some banks such as the Bank of Russia, on the other hand, want to explore the risks and benefits associated with the implementation of a CBDC before going for its issuance.