The head of the Bank for International Settlements’ Innovation Hub has a message for the world’s central banks: get on the digital currency train or get left behind.
According to Reuters, Benoit Coeure, a former European Central Bank official, made the remarks Friday (Sept. 10), warning that central banks are at risk of falling behind initiatives like the ones undertaken by Facebook and its stablecoin.
“The time has passed for central banks to get going,” said Coeure, addressing the European Financial Forum.
“We should roll up our sleeves and accelerate our work on the nitty-gritty of CBDC [central bank digital currency] design. CBDCs will take years to be rolled out, while stablecoins and cryptoassets are already here. This makes it even more urgent to start.”
A number of central banks in Europe, as well as the U.S. and the UK, have considered setting up a digital currency.
And as reported in this space last month, India is developing the framework for digital currency and is looking to launch a trial for a digital rupee in December.
Read more: India Jumps on CBDC Bandwagon with Digital Rupee Trials
China has been experimenting with a digital yuan, with its central bank reporting a total of $5 billion in CBDC transactions as of the end of June.
Related: People’s Bank of China Says Almost 25 Million eWallets Opened to Use Digital Yuan
According to Coeure, the EU is well positioned for the CBDC race, assuming it builds on its payment system and takes advantage of the safeguards of its data protection rules.
The European Central Bank is looking into the design and potential launch of a digital euro, something Coeure says could take up to five years.
“A CBDC’s goal is ultimately to preserve the best elements of our current systems while still allowing a safe space for tomorrow’s innovation,” he said. “To do so, central banks have to act while the current system is still in place — and to act now.”
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