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Central Banks must move quickly in establishing their own CBDCs

Benoît Coeuré said that the stablecoins and decentralized finance will put banks' business models to the test. He affirms that central banks must move more quickly to establish official digital assets. The comments demonstrate the growing anxiety among monetary regulators over the crypto-currency boom. According to the BIS, central bank digital currencies (CBDCs) should be simple to use, low in cost, convertible, and capable of instant settlements, among other characteristics. However, CBDCs will not be available for several years, whereas stablecoins and cryptoassets are already available. A CBDC, in contrast to a stablecoin, whose value is tied to the value of a largely unregulated cryptocurrency, is a digital representation of existing banknotes and coins. Coeuré stated that banks are expected to be a part of future CBDC systems.

 

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