The Bank for International Settlements (BIS) said the central bank’s digital currency issuance (CBDCs) will only be a success if the private and public sectors work together – as it comes closer to real-world testing of digital currencies.
Shared in a new report Cryptonews.comThe BIS launched what is known as the Helvetia project, claiming it is currently reviewing two proof-of-concept models that it has tested by issuing a wholesale CBDC in Swiss francs on a near-live system [distributed ledger technology-powered] Test platform.
The report’s authors claimed that “detailed analysis has shown that an agreement in both approaches is legally feasible and robust”.
However, it appears that the BIS recognizes that without the private sector on the side of the central banks, governments will struggle to get their CBDC projects off the ground.
The report’s authors wrote that their tests – carried out in conjunction with the Swiss National Bank (SNB) and the Six group, the operator of a Zurich-based digital asset exchange, had proven to be “a tangible example of the value of working together as change accelerates globally.
They added, “Private system operators and central banks alike have an incentive to preserve the use of safe money. Dealing with the political challenges and technical obstacles requires cooperation, including across borders. “
On another hint that central banks will struggle to be alone in issuing CBDC, the authors of the BIS report claimed:
“As private operators of financial market infrastructures drive innovation and new technology, central banks are increasingly useful in considering how they can continue to fulfill their responsibility to provide safe and liquid settlement assets. Within a central bank, those who implement monetary policy, oversee financial stability, and operate payment systems must continue to work together on a coherent strategy to prepare for the future. “
The willingness of the BIS to reach out to a digital asset exchange operator could be a sign that if central banks want to speed up the pace of their CBDC issuance, they may be forced to seek help from businesses to who work outside the conventional financial system.
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