World Economic Forum draws up framework for central bank digital currency

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The World Economic Forum (WEF) has published a framework for central bank digital currencies (CBDCs), the first of its kind to be drawn up by the international organization.

Tasked with improving global policy, the WEF said its guidelines were designed to help central banks choose whether CBDCs were the right option for their needs.

Known as the “CBDC Policy‑Maker Toolkit,” the 28-page document explores a range of CBDC options available to central banks, including retail, wholesale and cross-border currencies.

The document aims to address the concerns of central banks and countries of all sizes who may be considering launching a digital currency of their own, as well as defining and explaining the types of structures available.

The WEF said the framework was not an endorsement of CBDCs in any particular country, but was designed to make the relevant information available to institutions that may be weighing their options.

The framework comes at a time of increasing interest in CBDCs from central banks around the world, drawn to the benefits of payments and settlement on the blockchain.

Just this week, the Bank of England announced it was researching central bank digital currencies, alongside the Bank of Japan, the Bank of Canada and several other global central banks.

Having been researching CBDCs since 2014, China is regarded as the furthest forward with its plans, amongst a total of 18 central banks actively working on the technology.

Plans for a digital yuan are reported to be at an advanced stage, with media reports suggesting their CBDC could launch within months.

Rasheed M. Al Maraj, Governor of the Central Bank of Bahrain, said Bahrain would develop a pilot in line with the WEF framework: “We will pilot the new toolkit developed by the World Economic Forum. We hope that it will be an opportunity to learn, grow and to adapt to the changes in the Fourth Industrial Revolution.”

Meanwhile, Veerathai Santiprabhob, the Governor of the Bank of Thailand said the guidance could “usefully provide an actionable framework for CBDC deployment.”

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.