The Bank for International Settlements is working with the Central Bank of Switzerland on a new cryptoproject.
The project is actually a proof of concept of the CBDC, which should be completed by the end of the year.
Since the world’s central banks are so focused on the CBDCs, the BIS decided to join the movement.
The Bank for International Settlements (BIS), also known as the central bank of banks, is working on a new project with the Swiss central bank. This is a pilot project of the CBDC, which, according to a BIS executive body, should be completed by the end of the year.
The BIS is working on a CBDC pilot project
All over the world, Central Bank Digital Currency (CBDC) projects are emerging, which has been the case for over a year. Since China announced its own digital yuan, the central banks of many other countries have started to work on their own digital coins to catch up with the Eastern nation.
Now even the central bank of banks is working on it and plans to publish its “first major proof of concept of the CBDC with the Swiss central bank”.
The announcement of the project was made by Benoît Cœuré, head of the BIS Innovation Center, in a speech he recently gave at the Shanghai Bund Summit.
The summit was attended by many other influential personalities, including the retired founder of Alibaba, Jack Ma.
Details of the CBDCs
As some may know, the wholesale CBDC is a digital central bank currency held by banks, which would provide much cheaper transactions and much greater security than traditional financial systems.
They differ in many ways from regular crypto currencies. For example, they are managed by the central banks and not by the community, making them centralized. In some cases, they also do not require a block chain to function.
Nevertheless, they are similar enough to some cryptos to be considered digital currencies. Today, they are either tested, developed, researched or at least considered by at least 80% of central banks around the world.
Like most regular cryptos, CBDCs have great potential for enhancing international transactions. Cœuré even noted that the work of the BIS will ultimately pave the way for CBDCs in retail banking. The technical work is complex, but hopefully the day will come when the CBDCs of different banks will be compatible. Nevertheless, Cœuré said, people should not expect CBDCs to solve important social problems or revolutionize the financial industry. They are simply a better form of money that society can switch to in the coming years.