Head of Innovation at the Bank for International Settlements' views on CBDC, Libra, and Stablecoins

The head of the Innovation Hub at the Bank for International Settlements (BIS), Benoît Cœuré, a prominent French economist and former member of the European Central Bank's Executive Board, shared his views on central bank digital currencies (CBDCs) and stablecoins at last week's World Economic Forum (WEF).

The Head of Innovation Hub at the Bank for International Settlements (BIS), Benoît Cœuré, a prominent French economist and former member of the European Central Bank, shared his views on Central Bank Digital Currencies (CBDCs) and stablecoins at last week's World Economic Forum (WEF).

During a session titled "Creating Trusted Digital Currencies" at the discussion, various use cases of CBDCs and how they can meet the needs of the banking sector and the public were explored.

Cœuré emphasized that the needs of the most frequent users of CBDCs are more important than the underlying technology, which should be the focus of CBDCs. Currently, the cost and speed of cross-border payments are too high and slow, and improving cross-border payments for low-income and developing economies is urgent, not only as an inclusive economic issue but also as a global economic growth issue.

Cœuré believes that the advent of CBDCs will be a long road requiring international cooperation, but research should start now.

The Impact of Libra

Cœuré noted that while the innovation of Libra has attracted significant attention from politicians, there is less focus on CBDCs among European politicians. He hopes that central banks can unite to decide what they want to do and how to do it. Due to regional differences, this will also be a political discussion. However, he aims to provide feedback to the European Parliament and politicians. As a member of the G7 Stablecoin Group, Cœuré mentioned that despite the regulatory pressure on Libra, discussions with them continue, and they aim to leverage many of Libra's technological advantages.

Concerns about China's CBDC

Cœuré pointed out that China's leading position in CBDCs is why he urges central banks worldwide to unite. While CBDCs may unfold differently in various regions, he hopes this will not result in fragmentation. Fragmentation of the global financial system is detrimental to both commercial and financial stability.

Stablecoins Won't Replace the US Dollar

When interviewed, Cœuré mentioned that while stablecoins are beneficial for payment improvements, they will not have the chance to replace the US dollar as the international reserve currency because they must belong to the public and rely on trust from central banks and governments.

Further Reading

• Central Banks from Various Countries Join Forces with Plans for Digital Currencies in Over 18 Countries
• Reviving the Attraction of the US Dollar! Former CFTC Chairman and Accenture Advocate for Central Bank Digital Dollar

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