Central bank digital currencies: an opportunity for the monetary system
Speech by Mr Hyun Song Shin, Economic Adviser and Head of Research of the BIS, on the occasion of the Bank's Annual General Meeting, Basel, 29 June 2021.
The foundation of the monetary system is trust in the currency. Central bank digital currencies (CBDCs) build on this trust, offering in digital form the unique advantages of central bank money. They should operate in a two-tier monetary system, in which the private sector and central bank each focus on what they do best. CBDCs should be based on digital identification, with institutional and technological safeguards to ensure privacy. CBDCs can serve the public interest as an open platform that is conducive to a virtuous circle of greater access, lower costs and innovation for better services. Multi-CBDC arrangements can promote more efficient cross-border payments. Overall, CBDCs can meet the "triple imperative" of competition, data privacy and integrity that is raised by the centrality of data in the digital economy.
