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  • Writer's pictureDeborah

On September 30, the Bank for International Settlement (BIS) released 3 reports providing practical input on how central bank digital currencies (CBDC) for retail clients could enable innovation and best meet users' future needs through developing interoperable systems supported by both the public and private sectors.

The first report, System design and interoperability, focuses on the design of a potential retail CBDC whose characteristics are briefly summarized below.

System Design

  • A CBDC system would likely comprise similar elements and underlying functions as traditional payment systems (operator, participants, instruments, procedures, and rules for transferring funds).

  • A CBDC broader ecosystem will include end users, technical processing and supporting infrastructure providers as well as contextual legal, supervisory and contractual arrangements exist.

  • A CBDC ecosystem would include a CBDC core rulebook outlining the legal basis, governance, risk management, access and other requirements of participants in the CBDC system.

  • Participants in the CBDC system would act as intermediaries between the central bank and end-users.

  • Banks, payment service providers, mobile operators and fintech or big tech companies could act as intermediaries.

  • Intermediaries would use one or several processing infrastructures enabling payment messages to be processed, reconciled and to access and communicate with the core infrastructure.

“Accounts” and “tokens” in CBDC systems

  • Both accounts would require a ledger (neither would replicate cash-like transfers), use various means to identify users and could be implemented based on traditional technology or a distributed-ledger.

  • System designs would likely differ between jurisdictions and consider several elements, including: (i) continued access to central bank money, (ii) resilience, (iii) increased payments diversity, (iv) encouraging financial inclusion, (v) improving cross-border payments (vi) supporting privacy and (vii) facilitating fiscal transfers.

Privacy and data considerations

  • CBDC design would require to consider anti-money laundering and counter financing of terrorism risks (AML and CFT), Financial Action Task Force (FATF) recommendations covering cash or electronic payments.

  • The collection and processing of personal data would be subject to country-specific data protection regulations.

  • Privacy concerns should be considered for a system that facilitates fiscal transfers.


  • Interoperability for a CBDC system would facilitate an easy transfer of funds to and from other payment systems.

  • To achieve interoperability, central banks could opt to use established messaging standards, data and other technical standards or to build technical interfaces to communicate with other systems.

The second report, User needs and adoption analyses users’ motivations in adopting digital payment services and references the potential use-cases and design options for CBDC. CBDC success would depend both on consumer adoption and merchant acceptance. The report outlines that the common motivation for exploring a retail CBDC is its use as a means of payment and the fact that users would have access to safer instruments or currencies and highlights the type of issues that should be considered by jurisdictions when doing their own assessment.

The third report, Financial stability implications presents the conditions under which CBDC could pose material risks to financial stability and the ability of authorities to maintain financial stability. More specifically, it considers CBDC impact on the intermediation capacity and resilience of the banking system.

The group is formed of the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, Federal Reserve, Sveriges Riksbank (Sweden), Swiss National Bank and BIS.

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