Digital currency has become a buzz word across the world that central banks are engaging themselves with this. But fact is that no CBDC project focuses on cross-border payments rather than that the completion is among global governments to become the first country in the world to issue a central bank digital currency.
Cross-border payment is not the focus
We know that recently the BIS’ new CBDC has been revealed which was mentioned in the bank’s quarterly review. The Bank of International Settlements or BIS, owned by central banks fosters international monetary and financial cooperation and serves as a bank for central banks, analyzed that existing CBDC initiatives alongside major global issues in the market has a great impact. At least 17 governments from around the world are running after central bank digital currencies reported by BIS.
Where CBDC needs to be faster, cheaper and less risky but those governments are not trying to focus on that issue rather than they are trying to be the first one to introduce it. As reported from BIS, several central banks are working on cross-border payment trails with a consumer focus in parallel to their CBDC efforts. There are some different jurisdictions too and among them one is the costs of a retail CBDC would outweight the benefits at the current stage of development.
Potential of CBDC for cross-border transfers
The functions and plans around CDBC of different countries refer to the unwillingness to experiment with a new type of national currency on a global level. But in regard of CBDC, a positive view has been come from Christine Lagarde, the president of European Central Bank. Another comment in regard of CBDC came from central banks of Canada, the United Kingdom and Singapore that CBDCs can help improve counterparty credit risk for cross-border interbank payment. Sweden and the Bahamas are also walking across the same way and they are also determined to introduce their own digital currency project in 2020