Central banks should pay more attention to the cross-border use of central bank digital currencies (CBDCs) rather than concentrating mainly on domestic applications, according to the Bank for International Settlements (BIS), an organization that represents most of the world’s central banks.
- In a paper published Friday, the BIS said central banks are focusing on domestic issues, even though the implications of CBDCs go beyond borders. The World Bank and International Monetary Fund contributed to the report.
- If CBDC projects in different jurisdictions are coordinated effectively, the "clean slate presented by CBDCs might be leveraged to enhance cross-border payments," the paper concluded.
- Cooperation could take various forms, the report said. That could include establishing common standards between CBDCs to allow for interoperability or international payment infrastructures.
- Additionally, given that CBDCs will roll out at different paces in different jurisdictions, there needs to be interoperability between CBDCs and existing payment systems.
- Some central banks are already exploring international transfers. The "Multiple Central Bank Digital Currency Bridge" (m-CBDC) project between the central banks of Hong Kong, Thailand, China and the United Arab Emirates is designed to evaluate the feasibility of a pan-Asian payments network.