Countries Should Set Up Legal Frameworks to Support CBDCs: BIS Chief

Countries should set up legal frameworks that support the deployment of central bank digital currencies (CBDC), Agustin Carstens, general manager of the Bank for International Settlements (BIS) said on Wednesday. BIS is a group of the leading central banks of the world.

Around 80% of central banks are either not allowed to issue a CBDC under existing laws or they have legal frameworks which lack clarity on this matter, a 2020 paper by the International Monetary Fund said.

"This needs to be rectified. The public rightly demands forms of money that meet their needs and expectations," Carstens said at a conference in Switzerland.

Central banks around the world have been investing in exploring and addressing both the technical and operational requirements of a CBDC, he added. In 2022, 93% of central banks were engaged in some form of CBDC work, a BIS survey showed. The BIS itself has conducted multiple CBDC experiments and has called for countries to collaborate on their CBDC designs.

"It is simply unacceptable that unclear or outdated legal frameworks could hinder their deployment. The work to address these issues needs to begin in earnest. And it needs to proceed at pace," Carstens said.