Agustín Carstens, the general manager of the Bank for International Settlements (BIS), has emphasized the imperative for central banks to adapt to the digital age and take a leading role in fostering innovation. Carstens identified central bank digital currencies (CBDCs) as a "core element" in this leadership, acknowledging the challenges and potential threats associated with their implementation.
Speaking at a conference in Basel, Switzerland, on November 8, Carstens highlighted the varied technological infrastructures being developed by different countries for their CBDC projects as a notable challenge. He also underscored the risks of cyber threats and the potential for criminal activity by malicious actors. In addressing these challenges, Carstens prioritized the flexibility of CBDC designs and recognized the importance of maintaining appropriate levels of privacy to ensure public acceptance, especially for retail CBDCs.
The general manager pledged the Bank for International Settlements' support for central banks' digital efforts. This support is primarily facilitated through the BIS Innovation Center and the Cyber Resilience Coordination Centre. The Innovation Center has been actively engaged in various digital currency projects, collaborating with the Swiss National Bank on the development of a wholesale CBDC. Additionally, it has established joint platforms with central monetary authorities in China, Hong Kong, Thailand, and the United Arab Emirates. The center has also contributed to the development of a proof-of-concept for transactions with the European Central Bank's tracker, among numerous other initiatives.
Carstens' remarks underscore the recognition within the BIS of the transformative potential of digital currencies and the need for central banks to navigate these advancements. As CBDCs continue to evolve, the BIS is positioned to provide support and collaborative efforts to address the technological, security, and privacy challenges associated with their implementation.
