The Bank for International Settlements has announced the creation of a working group dedicated to the digital currencies of central banks. The aim is to evaluate the use of public cryptocurrencies and to study their technical, functional and regulatory aspects.
The Bank for International Settlements (BIS), an international financial organization, has set up a working group dedicated to central bank digital currencies, Reuters reported on 21 January 2020. The working group will be co-led by Benoit Coeuré, former member of the Executive Board of the European Central Bank (ECB), and Jon Cunliffe, Deputy Governor of the Bank of England.
In total, representatives from the ECB, the central bank of Sweden, Canada, Japan and Switzerland will be brought together to assess the use of central banks’ digital currencies while studying their technical, functional and regulatory aspects.
Several projects supported by central banks
Cryptocurrency projects carried out by central banks are exploding. In mid-August 2019, it was reported that China’s national cryptocurrency was about to be ready. Its commissioning date remains unclear. More recently, in November 2019, the European Central Bank was considering the implementation of such a tool. “The ECB and other EU central banks could explore the opportunities and challenges of issuing digital currencies,” read the proposal drafted by the Finnish Presidency of the European Union.
The Bank of France has also announced its plan to launch a digital currency through a call for projects in early 2020. This would be a euro in digital form whose emission mechanisms could be based on technologies such as blockchain. This project is supported by Bruno Le Maire, Minister of the Economy, who has repeatedly stated that a public digital currency could solve “certain financial transaction difficulties”, such as the modulation of transaction costs different depending on the state, particularly in Europe.
An alternative to Libra?
These alternatives do not bloom by chance. The Libra spectrum is the main source of motivation. Since the announcement of its creation in June 2019, the cryptocurrency carried by Facebook has made headlines. The increase in criticism and pressure from regulators has led some of its founding members to leave the project.
Called by the US Congress to speak in October 2019, Mark Zuckerberg tried to ease tensions. His argument was essentially based on the Chinese threat. “While we are debating, the rest of the world is not waiting. China is actively preparing to launch similar ideas in the coming months,” the Facebook boss told US lawmakers.