Here's why the Bank of England isn't fit to issue a CBDC yet

The results of the pilot study on the use of CBDCs conducted by the BRI are published. This is Project Icebreaker, in collaboration with the central banks of Norway, Sweden and Israel. The study aims to test the technical feasibility of cross-border transfers and to understand the technical and political trade-offs to be undertaken.

CBDC Interoperability

The Bank for International Settlements (BIS) has completed the pilot study on the use of central bank digital currencies (CBDC). This financial organization published the results a report. It carried out this study following the G20’s call for action on how to improve cross-border payments. The study showed that central banks will have almost complete autonomy over the design of their own CBDC. This, while making it interoperable with other CBDCs for cross-border transactions.

The project also demonstrated that cross-border transactions involving multiple CBDCs can be completed in just seconds. In comparison, on the SWIFT system, transfer times are several days. I’study also highlighted how a new CBDC system can reduce costs and counterparty risk for users.

A global effort to improve cross-border payments

Torbjørn Hægeland, executive director for financial stability at Norway’s central bank, praised the study. In the report, he said the project “contributes to the important global effort to improve cross-border payments”. This is of significant value to the bank’s work on an experimental CBDC for Norway, he added.

For Aino Bunge, deputy governor of the central bank of Sweden, CBDCs could allow instant transactions between currencies. They would greatly benefit end users. The completion of this study was done under the direction of Agustín Carstens, head of the BRI. Currently, it is the former governor of the central bank of Mexico, known for his harsh criticism of Bitcoin (BTC).

This is also the case of Hyun Song Shin, head of research at the BRI. He claims that without users, cryptos are just worthless tokens.

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