Using CBDC in a single system can solve some of the problems associated with cross-border payments. This is stated in the report of the Bank for International Settlements (BIS).
According to researchers, national digital currencies are especially relevant for emerging market countries. However, the expansion of the asset testing program in China and the launch of CBDC in the Bahamas were signals of the likely growth of such initiatives, experts said.
BIS noted that a single system using multiple digital currencies will solve a number of problems, including slow processing of payments.
“These advantages will be difficult to achieve if central banks do not take cross-border aspects into account when developing CBDCs from the outset and do not coordinate their activities at the international level to avoid mistakes of the past,” the document says.
Experts noted that such cooperation will give central banks a competitive edge over stablecoins. According to them, a variety of national digital currencies and “strengthening monetary sovereignty” will help prevent the widespread dissemination of the latter.
“A CBDC that is compatible with others and benefits from a diverse and competitive market for services would be a real public good. To achieve this, central banks will need to cooperate, ”concluded the BIS researchers.
Earlier, the Reserve Bank of India cited expanding access to financial services as an advantage of CBDC . But, according to researchers, the launch of a national digital currency could undermine the role of credit institutions.
Jamaica has scheduled CBDC pilot testing in December 2021. The Bank of Japan will begin experimenting with its own digital currency soon.
We will remind, the head of the US Federal Reserve System Jerome Powell said that CBDC will not replace conventional money , but will coexist with it.