Central banks are moving towards issuing their own digital currencies to improve the payment system, given the increase in electronic payments and the decline in the use of cash. Such digital currencies are known as CBDC. They also aim to mitigate the risk of financial instability arising from the creation of unregulated private electronic payment instruments, such as stablecoins. At present, there is still no specific legislation to regulate the issuance and distribution of CBDC. However, all countries are working on the development of such regulations. In recent years, different international organisations have issued various recommendations on this type of digital currency, considering that their issuance requires international cooperation and coordination.
CBDC: regulatory trends
Executive summary
The rise in electronic payments, the decline in the use of cash, and the risk of financial instability arising from the creation of unregulated private electronic payment instruments, has prompted the creation of central bank-issued digital currencies, known as CBDCs. Currently, there are no specific regulations governing the issuance and distribution of CBDCs. However, all countries are working on the development of such regulations.
Main Content
This Technical Note aims to provide an up-to-date overview of the global regulatory landscape for digital currencies, covering aspects such as the following:
- The benefits and risks of CBDCs. Some of the benefits of CBDCs are more efficient payments, the protection of monetary sovereignty, good financial inclusion and increased security. Some of the risks are the lack of privacy, the vulnerability of commercial banks and the effects on monetary stability.
- Current situation and main regulations. Different countries are issuing and regulating their own digital currencies at different speeds. This technical note summarises the degree of progress in the different geographies and will be updated periodically as significant advances are made in the regulation and issuance of CBDCs.
Download the technical note on CBDC: regulatory trends.