BIS published a report on the prospects for digital currencies of the Central Bank

The main focus of the BIS was solely on retail digital currencies of central banks. The authors of the report noted that private innovation can play an important role in the successful long-term development of retail CBDCs, and this requires productive interaction between regulators and stakeholders. These include public consultations, research on consumer payment behavior and case studies.

BIS noted that the launch of retail CBDCs may cause a number of legal issues in local jurisdictions, so lawmakers should define the concept of settlements and payments in the system, as well as think about data management and address the issue of privacy. While central banks will be able to freely issue retail CBDCs, competition laws and non-residents’ access to these government cryptocurrencies could be difficult.

“You may need to pay special attention to the limits on the amounts that are stored in CBDC and the rules for converting central bank digital currencies into other currencies. Therefore, international regulators should jointly develop rules for non-resident access to CBDC,” the BIS report says.

The researchers also raised the issue of using distributed ledger technology (DLT) to create government stablecoins. For their full-fledged work, it is not at all necessary to use DLT, BIS analysts noted. However, they acknowledged that this technology could simplify the programmability of central bank digital currencies and payment processing.

The central banks that participated in the BIS study have not yet made a final decision on launching their own digital currencies. However, they will continue to participate in CBDC pilot projects to explore different use cases.

Earlier, the head of the Innovation Center of the Bank for International Settlements (BIS), Cecilia Skingsley, suggested that tense geopolitical relations between some countries would prevent the massive introduction of state cryptocurrencies.