MNI BRIEF: BIS Sees Central Bank Digital Currency Unavoidable

Central bank adoption of digital currencies now appear to be unavoidable, according to Benoit Coeure, now the Bank for International Settlements lead voice on the issue, as he says 85% of central banks are studying them and 60% have some form of prototype, adding that "the train has left the station."

The BIS work, in a report published Wednesday, highlights ways that the hit to bank deposit taking from CBDCs could be cushioned and it makes a case for paying low, or no, interest rates on CBDCs and possibly tiering CBDC rates, but the BIS opposes putting a hard cap on the amount of CBDCs that can be held, as this would likely disrupt payment systems and hit liquidity.