Private Sector Crucial for CBDC Development, Says BIS Head

According to CoinDesk, Agustín Carstens, the head of the Bank for International Settlements (BIS), stated that central bank digital currencies (CBDC) are essential for financial system innovation, and the private sector will play a significant role in bringing them to market. Carstens made these remarks during a speech at a conference on CBDCs in Basel, Switzerland. He believes that CBDCs, whether in wholesale or retail form, will be at the core of the future financial system. Central banks worldwide are exploring the issuance of digital versions of sovereign currencies under the group's recommendation. However, Carstens emphasized that monetary authorities will have a limited role in CBDC issuance compared to the private sector. He said that most customer-facing services would remain within the private sector's domain, and cyber resilience among these institutions would be crucial for maintaining trust in the system. Collaboration between the private and public sectors is essential for managing existing and emerging cyber threats. Carstens also highlighted the security challenges in operating CBDC systems and stressed the importance of not ignoring other design objectives, such as maintaining an appropriate level of privacy, especially in retail CBDCs. He recently called on countries to establish relevant legislation to support CBDC issuance.