World Economic Forum unveils framework for national digital currencies
The World Economic Forum has unveiled a first-of-its-kind framework for digital currencies of central banks (CBDC).
The CBDC Rulemaker Toolkit is a guide for central banks to help them make decisions about whether to launch such digital currencies. Those who are already working in this direction will be able to “accelerate progress”.
Any CBDC implementation will have a “profound impact on internal and external affairs,” said Sheila Warren, head of blockchain and distributed ledger technology at WEF. “It is imperative for central banks to exercise caution and carefully analyze the associated risks and opportunities,” she added..
The 28-page guide provides information on CBDCs for retail, wholesale, cross-border and hybrid applications in developing and developed countries of all sizes. The preparation of the document was carried out in cooperation with central banks, scientific and financial institutions.
It outlines the CBDC assessment process step by step, including potential benefits and challenges. For example, a wholesale CBDC can help reduce costs in cross-border settlement, but may not be very useful for countries that already have an “efficient” system, while a retail CBDC will reduce the complexity of financial management, but will require significant investment in cybersecurity..
The WEF does not express positive or negative views on CBDC, but wants to help central banks “confidently” assess whether such a decision is appropriate for their economy.
The Governor of the Central Bank of Bahrain said that they have already adopted the leadership of the WEF, and the Bank of Thailand said that the presented “toolkit can become the basis for taking action when launching CBDC”.
Shortly before that, it became known that six major central banks had entered into cooperation to explore the possibilities of creating and using CBDC..
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