The issue of central bank digital currencies has come to the fore over the last two years. Although a relatively new popular phenomenon, digital currencies have existed for decades.
This report, a collaboration between IBM Blockchain World Wire and OMFIF, explains the purpose of wholesale central bank digital currencies, as well as the motivations and business case for central banks to adopt wholesale CBDCs. It also outlines key characteristics of such a system, including who the developer and issuer should be; the technology options and requirements for a successful payments system; the practicality and regulatory challenges; and the possible risks and policy implications.
The report findings were informed by 21 central banks, which participated in OMFIF’s survey between July-September 2017. Respondents came from institutions that are researching and trialing wholesale CBDCs (38%) as well as those that are not currently active in this field (62%).
76% of respondents have reportedly expressed uncertainty about the efficiency of distributed ledger technology (DLT)deployments, while most financial institutions surveyed said that they believed that central banks should issue their own digital currencies.
The report provides a wholistic view of approaches to setting up a wholesale CBDC and offers guidance for institutions on how to tackle the many challenges in store.