Agustin Carstens, General Manager of the BIS, urged governments to establish a legal framework to facilitate the creation and introduction of Central Bank Digital Currencies (CBDC) in a speech at the BISIH-FSI conference in Switzerland on September 27.
Carsatens has stressed the urgent need to address the legal barriers preventing CBDCs from operating because he finds it unacceptable that an ambiguous or out-of-date legal framework could obstruct the implementation of CBDCs.
He also brought up the International Monetary Fund (IMF) report, which revealed that about 80% of central banks are either prohibited from issuing digital currency by their current laws or the legal framework is unclear. In light of the public’s demand for payment methods that satisfy their needs and expectations, he urged that this need be recognized.
As per Carsten, customers are increasingly looking for creative payment methods that enable them to conduct transactions “across borders quickly, cheaply, and safely.” He stated that this further supported the need for central banks to create CBDCs for use within their respective territories.
Carsten also shared his opinion that countries must ensure the privacy of CBDC users, the protection of their data, the integrity of the financial system, and the ability of users to choose between CBDC and other forms of money.
According to a survey conducted by the Committee on Payments and Market Infrastructures (CPMI), 93% of central banks participated in CBDC-related projects in 2016. Others concentrated on retail CBDCs for use by the general public, while some focused on wholesale CBDCs for interbank transfers.
In the end, he said, “Central banks have a mandate to meet those demands and have made significant investments to address the technical and operational requirements for CBDCs. It is simply unacceptable that unclear or outdated legal frameworks could hinder their deployment.”
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