CBDCs can be used to invest in the protection of the fiat-based financial system. Cash is rapidly disappearing and its role as a payment medium will be significantly reduced in the future. CBDCs are essential for central banks in order to keep up with current developments and meet public demand.
According to media reports, Cecilia Skingsley was the First Deputy Governor of Sweden’s central bank Sveriges Riksbank. She made these remarks at Tuesday’s European Central Bank (ECB) Forum on Central Banking in Sintra, Portugal.
She stated that she sees it as an evolution in the central bank’s role rather than a revolution. “I think cash will disappear from payment methods, that’s for certain.”
Interoperability concerns with CBDC
According to the Swedish central banker, who was considered to be the front-runner for Sveriges Riksbank’s head, CBDCs might not be a solution to cross-border payment because there is a lack agreement and unanimity between governments on key issues.
When she spoke about the future, when most countries will have their CBDCs launched, she stated that interoperability and their interaction can be complicated.
“We need to consider different levels of interoperability …. She stated that it would be difficult for everyone who wants to participate in the project to agree on governance, supervision, and the like.
CBDC Linking: There is no agreement
SWIFT, a global financial messaging service, stressed that CBDCs must work together to facilitate cross-border transactions.
CryptoPotato reported last month that American politicians insist that China’s digital Yuan – e-CNY – should not be permitted in American app shops. Some US politicians advised American athletes to not use the eCNY during 2022 Beijing Winter Olympics, citing espionage concerns.
Skingsley appointed Head of BIS Innovation Hub
Skingsley’s comments on CBDCs, phasing-out of cash and phasing in cash are significant given her appointment as head of Bank for International Settlements (BIS), Innovation Hub this month. Skingsley would take over the new position in September 2022, for a five-year period.
“Cecilia Skingsley has a reputation for being a respected leader in international innovation issues. “She has been a key player in the advancement of international initiatives directed toward the development CBDCs,” according to a BIS release.
The BIS is an association representing central banks around the world. Its Innovation Hub is active in several CBDC projects. The BIS is also expected to publish a report next month on CBDC interoperability.
Marla Brooks – Financial Analysis
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