BANK FOR INTERNATIONAL SETTLEMENTS

BIS and the various groups and committees it supports convene international discussions, conduct research, and elaborate guidelines and policy recommendations on digital currencies and crypto-assets, in particular with regard to their implications for monetary and financial stability at both the national and international level.

BIS started analysing central bank digital currencies (CBDCs) in 2018, when the Committee on Payments and Market Infrastructure and the Markets Committee published a report which noted that central banks must carefully weigh the implications of CBDCs for financial stability and monetary policy. In January 2019, BIS conducted a survey among central banks and found that ‘only a couple of them’ saw the issuance of CBDCs as likely in the short to medium term. However, a new survey conducted one year later indicated that 10% of central banks were running CBDC pilot projects, while 80% were engaging in some work on CBDCs. Currently, BIS, together with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, Sveriges Riksbank (the central bank of Sweden), and the Swiss National Bank ‒ are assessing potential cases for CBDCs in the framework of a dedicated working group.

The Committee on Payments and Market Infrastructure has also been investigating the global impact of stablecoins (a type of cryptocurrency designed to maintain a stable market price), in co-operation with the G7 Working Group on Stablecoins and the International Monetary Fund. A joint report published in October 2019 found that while stablecoins have the potential to contribute to the development of more efficient global payment arrangements, they also pose challenges to competition policy, financial stability, monetary policy, consumer protection, tax compliance, anti-money laundering policies, and even the international monetary system.

The crypto-asset market is another topic that has attracted the interest of BIS and its associated bodies. For example, the Basel Committee on Market Supervision noted in a 2019 statement that ‘the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential to raise financial stability concerns and increase risks faced by banks’ and advised banks to proceed with caution if they decide to provide crypto-assets-related services. Later that year, the Committee launched a public consultation on the design of a prudential regulatory treatment for crypto-assets.