On 9 October 2020, the group published its first report on the foundational principles and core features of central bank digital currencies (CBDCs). The group is comprised of:
- Bank of Canada,
- European Central Bank,
- Bank of Japan,
- Sveriges Riksbank (Central Bank of Sweden),
- Swiss National Bank,
- Bank of England,
- Board of Governors Federal Reserve System, and
- Bank for International Settlements
Given the size and influence of the members in this group, the report will be of interest to anyone working in the crypto space. The report sets out the following foundational principles of a CBDC:
- a central bank should not compromise monetary or financial stability by issuing a CBDC;
- a CBDC would need to coexist with and complement existing forms of money; and
- a CBDC should promote innovation and efficiency.
The report has been issued shortly after the EU published its proposed Markets in Crypto Assets Regulation and seems to now signal the end of the "research" and "getting comfortable with crypto" phase that the biggest players in the world's economy have clearly gone through in the last 2-3 years.
We shall watch with particular interest how this movement towards regulation will affect the crypto world and whether only the truly decentralised protocols will survive without being regulated.
CBDC is “a digital form of central bank money that is different from balances in traditional reserve or settlement accounts” (CPMI-MC (2018))