Innovation and development are one thing, but the disturbance and complication among countries may hinder the required collaborative approach.
Given the political situations within various countries along with geopolitical relationships among countries across the globe, it’s needless to say that even the CBDCs like technology will have to suffer the repercussions. First Deputy Governor of Sweden’s Central Bank Sveriges Riksbank, Cecilia Skingsley stated something similar while saying that central bank digital currencies or CBDCs would not be a ‘silver bullet’ that has potential to solve all the cross border payments issues.
Cecilia Skingsley was speaking at the annual forum on Central Banking of the European Central Bank at Sintra, Portugal held on Tuesday. Skingsley while citing the example said that countries would not play nicely to each other as it is not necessary for them to do so and that would hinder the interoperability making it complex and layered, which could be the most crucial factor of digital currencies to interact with each other during payments.
The Central Bank deputy governor said that there is a need to think about interoperability’s different levels. She further added that it is going to be a super fun journey for those who want to participate in the governance and supervision of such things.
The forum that Skingsley attended was also joined by Fabion Panetta, Executive Board member of ECB, director General of Market Infrastructure and Payments at ECB Ulrich Bindseil, an economist from Princeton Markus Brunnermeier and director of MIT Media Labs Digital Currency Initiative, Neha Narula.
Recently, Skingsley became the head of the innovation wing at the world’s central banks association, the Bank for International Settlements (BIS). She said that BIS is to release a CBDC interoperability report in upcoming weeks. Apart from this, BIS Innovation Hub is also conducting some experiments with CBDCs of Central Banks around the world.
BIS told all the Central Banks worldwide in September, 2021 that they should be working now on CBDCs as the future is digital and central banks must evolve to get fit into it. During the same time frame, China had made progress in terms of its sovereign currency Renminbi’s digital version.
In response to the boom of the crypto market that hit almost $3 trillion last year, many countries have started looking towards and some of them started working to establish CBDCs.
Source: https://www.thecoinrepublic.com/2022/06/29/will-governments-limit-foreign-access-to-their-cbdcs-given-geopolitical-complications/