Agenda

Central banks around the world are working to safeguard public trust in money and payments, fostering innovation that serves the public interest. The BIS is closely involved in exploring the contribution CBDCs could make.

This presentation will provide an overview of international work on retail CBDC and evolving thinking on motivations, system design and safeguards.

A clear definition and a solid understanding of the term "Central Bank Digital Currency" is an indispensable basis for discussions on this topic.

In this presentation, the basics of CBDC will be examined from different perspectives and the relationship between different aspects will be explained.

In December 2019, the Central Bank of the Bahamas was the first central bank to indroduce a retail CBDC. Almost 2 years after the start of the project «Sand Dollar», it is worth taking a look back as well as forward. Were the goals set achieved? What were the biggest challenges and how were they solved? What is the status of the project today, and what are the further developments planned for the future? And finally: what are the key learnings? These questions will be addressed in this session.

The Eastern Caribbean Central Bank (ECCB) launched the DXCDCaribe project in March 2019. 

The pilot involves a securely minted and issued digital version of the EC dollar – DCash, which is issued by the ECCB. It is distributed by licensed bank and non-bank financial institutions in the Eastern Caribbean Currency Union (ECCU) and can be used for financial transactions such as  consumers to merchants and people-to-people (P2P) transactions, all using smart devices.

The objective of this pilot is to assess the potential efficiency and welfare gains that could be achieved: deeper financial inclusion, economic growth, resilience and competitiveness in the ECCU, from the introduction of a digital sovereign currency.

According to a study published by the IMF, only a minority of central banks are legally authorized to issue a CBDC. For the majority of central banks worldwide, is not clear whether they have a solid legal basis for introducing a CBDC, and a considerable proportion of central banks are clearly prohibited from issuing a CBDC.

This is in contrast to the flourishing discussions and activities taking place in this field.

Clearly all legal issues need to be clarified and a solid legal foundation established before the introduction of a CBDC can be considered.

This session will examine CBDC from a legal perspective on several levels: At the top level, a global overview of the legal situation will be given. At a second level, the criteria that must be met for the introduction of a CBDC in a particular jurisdiction will be assessed. And a third level looks at the requirements that need to be met in order to transfer one unit of a CBDC from one owner to another on a legally sound basis, whether in a domestic market or across borders.

The presentation will update on the Bank of England's work on CBDC to date, including the key policy, economic and technology issues that are a focus of our work and the next steps following our recent publication of a discussion paper on new forms of digital money.

The United Nations (UN) Secretary General’s Task Force on Digital Financing of the Sustainable Development Goals (SDGs), reported that digitization increases the potential for the financial system to better serve the interests of people whose money it manages. If central bank digital currencies (CBDCs) are properly designed and widely adopted, they could become a complementary means of payment that addresses specific market failures, protects citizens from crime, and brings financial services to many people who are not covered by the currency financial system. During this session, hear about the potential for CBDCs to have a transformative impact on the lives of citizens in developing economies and key design considerations in making CBDC an effective tool for financial inclusion.

The Digital Dollar Project strives to advance exploration of a United States Central Bank Digital Currency (CBDC). The purpose of the Project is to encourage research and public discussion on the potential advantages of a digital dollar, convene private sector thought leaders and actors, and propose possible models to support the public sector.

The Central Banks have the mandate to maintain price and financial stability. The key instrument through which these policies are maintained is central bank money. The presentation focuses on how to balance innovation and risks when upgrading the technology behind such a crucial instrument. It presents NBG’s findings researching CBDC technology and designing its implementation principles. The focus will be on the new strategic, legal, technological, monetary, and financial stability risks of CBDC; what we have to know about unknown risks of CBDC and how this should shape implementation roadmap and guide design of partnership models with technology providers.

Currently, many central banks develop forms of Central Bank Digital Currency (CBDC). New technical solutions provide ample options for the design. However, the role of money, the necessity to serve the customers need, the urgency to mitigate or avoid major risks or pitfalls and the overall implications for financial markets are aspects not to be ignored. Almost all conceivable features are possible, but only a limited combination of them may be desirable and reasonable. Clearly, in the design of CBDC, form must follow function.

The ECB is studying the possibility of issuing a digital Euro for use in retail payments.

The ECB has carried out a consultation to understand the needs and expectations of the public. This consultation has produced the following key findings :

• Privacy is valued most for a possible future digital euro
• There is a preference for a digital euro being integrated into the existing banking and payment systems

In this session, representatives of the ECB and the European Commission will provide insights into the issues they are dealing with in the context of this project.

We want digital cash to be hard for criminals to abuse, but we also want it to retain the privacy characteristics of its physical cousins. Suggestions about how to resolve this tension abound. Some privilege one of these ideals over the other. Others call for an uneasy compromise, perhaps based on the amount of money changing hands. Is this a zero-sum game, or is it possible to have both? In this presentation, we describe how we might build "provisional anonymity" into digital cash such that criminals find the ecosystem intolerable, people with honourable behaviour retain their privacy, regulators achieve strong oversight, and law enforcement has recourse -- all without backdoors in encryption. We believe a mechanism like this is necessary if CBDC is to achieve its promise as a public good.

Analyse CBDC projects across the globe with deep dives into practical scenarios – wholesale, retail payments, cross-border settlements. An approach to scheduled implementation and building partnership of the fintech market participants. CBDC ecosystem - how to build it successfully.

In today's banking system, the roles and responsibilities between the central bank and commercial banks are clearly defined and regulated.

Should a CBDC be introduced, the roles and responsibilities of the central bank and the commercial banks must also be clearly defined to reflect the changes a CBDC brings to ensure that the banking system continues to function stably and smoothly.

What will be the role of commercial banks ? What adjustments will be necessary at the organizational and technological level? What are opportunities and risks associated with CBDC for commercial banks and the financial system ? How can they be managed?

This panel discussion explores these questions.

The pandemic has hastened the decline of cash by four-five years. The world has shifted from asking ‘whether’ digital currencies will succeed to ‘how and when’ they will become mainstream.

Bitcoin’s market cap makes it too important to ignore. Big players who buy and sell Bitcoin have considerable market-moving power. But bitcoin transactions and its tradability are still limited. The real debate is whether rising valuations alone can be reason enough for Bitcoin to evolve into an asset class, or whether its illiquidity is an obstacle.

Central banks and governments understand that cryptocurrencies are here to stay, and they are expected to start regulating crypto assets late this year or early next year. They are also speeding up research on their own Central Bank Digital Currencies (CBDCs) and launching pilots.

This panel discussion examines the roles, interrelationship and interdependencies of CBDC, microcredit, and women. In the micro-credit community, women represent a large part of the borrowers and play a very important role. People who rely on micro-credits are disproportionaly at risk of financial exclusion, which in turn is one of the main arguments for introducing a CBDC. Can CBDC be the catalyst for financial inclusion and empowerment of women?

There is a lively interest in CBDC on a worldwide level. Numerous central banks have conducted studies on this topic, others have implemented a pilot project or even introduced a CBDC. 

Central banks need to be clear on what a CBDC is ‘for’. Already there are examples where goals differ reflecting the society and the country’s priorities. In fact, are CBDCs really the best solution ?  Is there a need for CBDCs or are other agendas driving the interest? 

Are CBDCs just digital fiat currency providing choice and confidence, or are central banks seeking to keep control of a radical financial revolution enabled by digitisation ?

This session will discuss the purpose of CBDCs as well as their pros and cons.

Evaluating the pros and cons of CBDC, establishing a sound basis for decision-making, and making a decision about CBDC is a challenging task in itself. Once a central bank decides to implement a (pilot) CBDC project, a plan is needed that addresses key questions to test design decisions and build confidence in the answers. This panel will share a wide range of perspectives and a wealth of experience about how to evaluate, plan and implement a CBDC project.

Today cross-border and, in particular, intercontinental payments are relatively slow and costly. This is an anachronism in a highly digitized world. 

Could CBDCs provide a more efficient global payment system? What services would such a system need to provide, and what challenges would need to be overcome? What are the alternative approaches and how is a CBDC better? 

Possible answers to these questions will be deliberated in this panel discussion.

This presentation will showcase five success factors for institutional grade tokenization, and will illustrate them with a real world example.

1. Forces / timeline events that are pushing Central Banks to digitize their currency

2. Compare and contrast CBDCs with private digital currencies

3. Bitt's experience working with Central Banks, including the solutions we offer and how they are assisting Central Banks on their CBDC journey.

Whether or not the final deployment of CBDC by a financial authority ends up on the Cloud or on premise, the cost-effectiveness of on-demand IT resources delivered through Cloud on a pay-as-you-go basis can be a great value for institutions as they progress through their journey from discovery, to experimentation, proof-of-concept, pilot, and launch of their CBDC. Cloud computing reduces the upfront investment in infrastructure and provides the scalability, security, and resiliency required of a CBDC ecosystem. In this session, we will explore the characteristics of Cloud Computing as a development environment for CBDC. We will examine what the Cloud is and why it is suitable for central banks, financial institutions, fintechs and other ecosystem players to build and deploy their solutions on Cloud. We will also provide some examples of how Cloud Computing presents important opportunities for ancillary services such as analytics for monitoring economic conditions, fraud detection and anti-money laundering. 

Retail CBDCs require specific architectures and stack to be deployed atlarge scale and trigger a migration from legacy rails to this new type of money. Mr d’Haussy from ConsenSys will share his learnings from retails CBDC works in Asia Pacific.

A CBDC must meet requirements of various stakeholders. For example, it should function reliably & quickly, protect privacy, be scalable and easy to understand for the user. Furthermore, It should also be secure and resistant to cyber attacks and interoperability with other systems should be ensured.

These requirements place very high demands on the underlying technology. But what role does the underlying technology play? And what exactly are the requirements to be met and what solutions are suitable to satisfy them?

In this panel discussion, these questions will be discussed.

Central banks must take into account privacy issues in the design of CBDC, both vis-à-vis private commercial interests and vis-à-vis the state itself. At the same time, a balance must be struck between protecting privacy and preventing illicit financial activity. Cryptography can contribute to possible solutions but there are trade-offs between privacy, efficiency, security, and CBDC functionalities. 

From financial inclusion to driving the digital economy: an innovative CBDC design meets market needs. As central banks move closer to issuing a digital currency, one important feature needs to be examined: programmability. It comes with huge opportunities but not without its challenges. For central banks, programmability is a crucial design feature that ensures universal  future-proof payments. It is no less a door opener to new markets that herald entirely new business models. 

This session will cover the following questions: 

• Do we have a common understanding of programmability? 
• What would be the implications of programmability? 
• What would be the roles of the central bank and the private sector? 
• Why is programmability needed for central banks to foster innovation through CBDC?
• How can Filia ensure financial inclusion and enable programmable payments in innovative digital business models?

Different technical solutions are available to implement a CBDC.

The starting point for making good decisions about the most suitable technology is to understand the key technology options and their advantages and disadvantages. Inevitably trade-offs will be required and a thorough understanding of the issues is necessary to make decisions.

Of equal importance are agreeing and setting out standards underlying the end-to-end system so that the CBDC can work across payment system partners both domestically and internationally. 

The experts on this panel will discuss the advantage and disadvantages of the different technical solutions at hand.

Several central banks from all over the world have implemented pilot CBDC projects in their jurisdiction.

What were their objectives when they set out to realize such a project, and what did they achieve? What were the main challenges they encountered, and the key takeaways? 

Representatives from different central banks share their insights obtained from their CBDC projects.