Central bank digital currencies - putting a big idea into practice

Remarks by Mr Agustín Carstens, General Manager of the BIS, at the Peterson Institute for International Economics (PIIE) discussion on Central Bank Digital Currencies, Basel, 31 March 2021.

Central bank digital currencies (CBDCs) are an opportunity for central banks to offer a technologically advanced representation of central bank money for the digital economy. Their introduction will have profound effects for users, central banks, financial institutions and the international monetary system. A retail CBDC could address long-standing and emerging issues in payments. It could increase competition, lower fees and encourage innovation. CBDCs would be part of an ecosystem with a range of private sector payment providers, and be designed to enhance efficiency without impairing central banks' monetary policy and financial stability mandates and within today's two-tier financial system. Multi-CBDC arrangements could tackle frictions in today's correspondent banking systems, such as differences in the opening hours of payment systems, varying communication standards and a lack of transparency around exchange rates or fees. Central banks around the world are collaborating to put this big idea into practice.