The General Manager of the BIS spoke at an event in Switzerland about the key needs to improve experiences for CBDC users and increase adoption.
The recent BIS Innovation Hub conference in Switzerland saw an official making interesting statements on central bank digital currencies (CBDCs). Agustín Carstens, the General Manager at the Bank for International Statements, had interesting insights to share at the conference. He mainly spoke on the privacy and freedom of CBDC users and the need for a legal framework.
Carstens said user privacy and the freedom of choosing between CBDCs and other forms of money could help drive adoption. In his opinion, a legal framework around the space could also help in CBDC adoption. He implied only the legal authority of a central bank to issue CBDCs will help improve the legitimacy of CBDCs.
“According to an IMF [International Monetary Fund] paper published in 2021, close to 80% of central banks are either not allowed to issue a digital currency under their existing laws, or the legal framework is unclear,” he stated.
His speech also referred to a BIS study which indicated the progress of CBDCs worldwide. According to the study, 93% of central banks were involved with CBDCs. Carstens mentioned how legal backing around its functioning would be helpful.
He also stressed three core areas for CBDC adoption. It included privacy for CBDC users, the right to choose between types of money, and the integrity of the financial system. Broadly, the BIS official called for reforms in the existing legal frameworks to improve the core aspects of CBDCs.