General manager of the Bank for International Settlements (BIS), Agustín Carstens, believes central banks have a responsibility to be at the forefront in the digital age and lead innovation, especially Central Bank Digital Currencies (CBDCs).
In a Nov. 8 statement, during his opening remarks at a conference in Basel, Switzerland, Carstens called central bank digital currencies (CBDCs) the “central element” of this leadership. He emphasized the potential threats and challenges to implementing them, and among them is the variety of technological infrastructures that countries plan to use for their CBDC projects.
The conference was themed, “Securing the future monetary system: cyber security for Central Bank digital currencies,” where he spoke on central banks engaging with new technologies and threats, and also the need to prepare security approaches for a range of different possibilities.
Speaking on the priorities in adapting the CBDCs to potential threats, the BIS General Manager named the flexibility of its design as the number one issue.
“A key challenge is that many jurisdictions have yet to decide on which form their CBDCs will take or what technical architecture will underpin their design.”
He also mentioned privacy problems:
“Maintaining an appropriate level of privacy, for example, will be crucial to ensuring public acceptance of retail CBDCs.”
Carstens said the BIS would support central banks with their CBDC efforts through the BIS Innovation Hub and Cyber Resilience Coordination Centre.
The BIS Innovation Hub has helped several central banks with CBDC projects. These include the Swiss National Bank’s wholesale CBDC, and a joint platform for the central banks of China, Hong Kong, Thailand, and the United Arab Emirates. It is also developing a transaction tracker with the European Central Bank.