CBDC on circuit board

BIS chief says wholesale CBDCs are coming ‘really soon’

Wholesale central bank digital currencies (CBDCs) will launch in the near future, says the Bank for International Settlements’ (BIS) Agustin Carstens.

In a recent presentation, he doubled down on the organization’s commitment to enabling wholesale CBDCs, which he says are less complex and risky than retail digital currencies.

A former governor of the Bank of Mexico, Carstens is the BIS general manager, a position he has held since 2017. In his conversation at the seventh annual DC Fintech Week, he discussed the future of CBDCs and the role of a unified ledger in fostering cross-border CBDC transfers.

“A modern CBDC at the wholesale level will be developed quite fast and will be a reality quite soon in probably most of the countries of the world,” stated Carstens, as reported by Ledger Insights.

A unified ledger is a proposed financial market infrastructure by the BIS that brings together tokenized deposits, CBDCs, and tokenized assets on one platform. It allows for finality in transactions, automation, and integration and cuts out the need for reconciliation and manual interventions.

While this unified ledger is critical for interoperability and cross-border transfers, Carstens says that deploying domestic infrastructure is more important. Once national systems are operational, it will be easy to build other layers on top, he told the attendees.

In a separate speech last week at a BIS conference in Basel, Switzerland, Carstens doubled down on the need for CBDCs.

“…it is increasingly clear, at least to me, that these new forms of money will sit at the core of the future financial system,” he stated.

He acknowledged the risks, key among them being cybersecurity threats, all while casting aspersions on digital assets.

“The crypto universe has provided us with several case studies of how easy it is for hackers to infiltrate poorly designed and poorly supervised financial systems. High-profile security breaches have been one factor—admittedly, among many others—that have undermined trust in cryptocurrencies as useful financial instruments,” he said.

Meanwhile, several central banks are advancing their CBDC projects. Switzerland’s central bank recently announced a new pilot for a wholesale CBDC with commercial banks, including UBS (NASDAQ: UBS), the country’s largest lender.

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.

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