After the collapse of the Terra Luna crypto last year, the Bank for International Settlements took a series of measures. In particular the 1% cap on banks’ bitcoin reserves. In 2023, it intends to develop a stablecoin monitoring platform and focus more on central bank CBDCs.
Regulation of CBDCs and stablecoins at the heart of BIS concerns
Commonly referred to as the bank of banks, the BIS announced its work plan for 2023 on February 07. In order to improve its payment system, it will focus on central bank digital currencies (CBDCs). In addition, the Swiss-based institution will work on the project Pyxtrial. Which is an experiment of BIS Innovation Hub, a London subsidiary of the bank. This project will enable systemic monitoring of stablecoins.
The BIS noted that most central banks were not sufficiently equipped to tackle asset-liability mismatches. It is therefore this problem that Pyxtrial will solve by developing a stablecoin balance sheet control platform. The project uses integrated data to help supervisors and regulators create policy frameworks.
As for CBDCs, the bank said that improvements in payment systems were at the heart of its concerns. Evidenced by the 15 places out of the 26 projects that were developed over the previous two years. This priority reflects the interests of G20 countries and the central bank for cross-border payments.
Rosalind, a joint Bank of England and BIS project plans to experiment with CBDC distribution through an API ecosystem. An initiative already observed in China through the e-CNY or digital Yuan. Through this approach, regulators and other institutions want to stimulate the adoption of the CBDC by populations.
In addition, the BIS and the central banks of Hong Kong and Thailand came together in September for a pilot project. THE Multiple CBDC Bridge (MBridge) also involves the central bank of China, the United Arab Emirates and 20 commercial banks.
With the exception of Nigeria, all of these countries that have developed a CBDC are located in the Caribbean, according to CBCD Tracker. However, pilot projects are underway in more than 17 countries. Mainly in Asia, it is the Chinathere South Koreathere Malaysiathere RussiaI’IndiaTHE Kazakhstan and the Thailand.
Although most countries ban cryptocurrencies like China, they are still developing central bank digital currencies (CBDC). For many, it is a question of facilitating payments and, by extension, cross-border payments. It is therefore in convergence of this that the BRI, the bank of banks, has set up the Pyxtrial project.
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