The international financial authorities and the most powerful countries will create rules to regulate and issue CBDC, central bank digital currencies.
The International Monetary Fund, the World Bank, the Bank for International Settlements and the G20 (the organization that groups the 20 largest economies in the world) are establishing official standards to regulate and issue sovereign digital currencies or CBDCs.
The Group of Twenty (G20) said in a report today that it is working with the International Monetary Fund (IMF), the World Bank, and the Bank for International Settlements (BIS) to formalize the use of central bank digital currencies (CBDC) in banking systems. CBDCs are stablecoins tied to nations’ fiat currencies.
According to the report, by the end of 2022, members of the G20, the IMF, the World Bank, and the BIS will complete the regulatory frameworks for stable currencies, the research, and selection of designs, technologies, and experiments of CBDC.
Technical capacities to facilitate CBDC transactions between countries by the end of 2025.
The countries “will examine the scope of new multilateral platforms, global stablecoin agreements, and central bank digital currencies to address the challenges facing cross-border payments without compromising minimum standards of supervision and regulation to control risks to monetary and financial stability. ”Said the G20 Financial Stability Board (FSB), a body formed after the 2008 financial crisis.
North American, European and Japanese banks said that CBDCs should be interchangeable with existing forms of money and resemble cash in their ease of use in a wide range of payment types at low or no cost.
They highlighted that CBDCs could improve cross-border payments, counter Facebook’s Libra-like corporate digital currencies, and transfer emergency fund payments to consumers during the coronavirus pandemic, according to the report. But CBDCs would not be anonymous and self-executing, the report said, differing from virtual currencies whose distributed ledger technology they would borrow.
For its part, also last week the Bank of Japan published a report in which it revealed that the digital yen would begin to take shape in 2021.
On the other hand, the European Central Bank is also thinking about the future possibility of the digital euro. An ECB report indicated that the issuance of a digital euro would be announced in April next year. Two weeks ago, an ECB executive said that the development of a digital euro could save the area from relying on digital currencies issued by foreign entities.
By: Jenson Nuñez.