The Bank for International Settlements (BIS), has revealed that it’s collaborating with Switzerland’s central bank to carry out a proof of concept for its central bank digital currency (CBDC) and the project is scheduled to be completed by the end of this year.
The BIS to Trial Own CBDC
At a time when over 80 percent of apex banks across the world are engaging in one form of digital currency development or another, the central bank of central banks, the Bank of International Settlements (BIS) has hinted that it’s now working on a proof of concept for its own central bank digital currency (CBDC).
Per sources close to the matter, Benoit Coeure, head of the BIS Innovation Hub made the revelation via a conference call during the Shanghai Bund Summit. Specifically, the 51-year-old former executive of the European Central Bank (ECB) has stated categorically that the BIS is now joining forces with the Swiss central bank to launch a CBDC pilot before the end of 2020.
The official stated categorically that the BIS plans to tap the experience garnered by other central banks from their CDBC projects, especially for cross-border payments and settlements.
In his words:
“By the end of this year, we plan to publish our first wholesale CBDC proof-of-concept with the Swiss central bank. Going forward, we plan to build on the experience of central banks like the Bank of Thailand, the Monetary Authority of Singapore, the Swiss national bank and the Hong Kong Monetary Authority, in terms of using CBDCs for cross-border payments.”
Paving the Way for Retail CBDCs
At a time when the People’s Bank of China (PBoC) is doing everything within its powers to make its citizens embrace the digital yuan with open arms, Coeure says the BIS’ pilot will focus on paving the way for the creation of retail versions of CBDCs, while also formulating a system that would foster interoperability between various CBDCs.
What’s more, Coeure says the PoC will be entirely different from previous conceptual research projects, as it will focus on creating practical solutions.
Interestingly, unlike bitcoin (BTC) and other cryptos, which are fast revolutionizing the world of finance and enriching the masses, Coeure has made it clear that the primary function of a CBDC is to be a better form of money and make payments easier globally.