Legal frameworks ‘must keep up’ for CBDC implementation: BIS

BIS head Agustin Carstens believes that the right legal framework is key for issuing CBDCs


Rabanser/Shutterstock modified by Blockworks


The current monetary system “needs to evolve,” according to a speech from Agustin Carstens, the general manager of the Bank of International Settlements.

He did, however, note that the current monetary system works currently as it stands. The evolution includes the implementation of a central bank digital currency (CBDC).

Carstens’ speech comes as some central banks, such as the Bank of Canada, have come forward to say that “significant” barriers remain before it can issue a CBDC, and the need is not yet there. 

However, back in August, the Bank of Canada added that it is “committed” to being ready to focus on a CBDC “should the need arise.”

“Central banks have a responsibility to meet the public’s demands and drive innovation in money and the financial system more broadly. But they cannot do this alone. They must work closely with other stakeholders, including the private sector,” Carstens continued

Read more: IMF advisor sees power in global ledger that works with CBDCs

A retail CBDC has “potential” to meet the needs of the public, which are also evolving. This means, he added, that the “legal framework must keep up.” 

According to a 2022 BIS survey, central banks exploring “some form” of CBDC rose to 93%. By the end of the decade, it expects roughly 15 retail CBDCs alongside nine wholesale CBDCs to be rolled out.

Read more: BIS lays out steps for ‘secure and resilient’ CBDC systems

But before CBDCs can be launched, Carstens says that the legal framework has to be updated. An IMF paper published in 2021 said that 80% of central banks are either not allowed to issue digital currency or are unsure due to unclear legal frameworks. 

Carstens said that it “needs to be rectified” due to the “mandate” that central banks have to meet the needs of the public.

In order to get countries close to the issuance of CBDCs, “different legal systems approach these questions in different ways. It is for each jurisdiction to decide whether to issue CBDC and how to balance the rights and obligations of its users at a national level.” 

Carstens also added that “international coordination and cooperation is critical” and that digital currencies that don’t interoperate would be “unfortunate.”

His thoughts echo those of other regulators, such as the Monetary Authority of Singapore, which said in June that interoperability was a focus area

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

ao cover.jpg


Arweave recently launched the testnet for AO computer, a new messaging protocol that will sit atop a PoS network and aims to become a scalable global compute platform through parallel processing and modularity.


Ore’s price more than tripled as the supply of new tokens paused


I spend an unhealthy amount of time thinking about crypto securities law — and I can’t see how ETH is now a securities offering under Howey


Regulators in South Korea, Japan and Singapore could follow Hong Kong’s lead as Asia responds to spot bitcoin ETF approval in the US


Martin Grant worked with the Fed for roughly 30 years before leaving his position in 2022


BitGo CEO Mike Belshe shared his thoughts on the halving and bitcoin ETFs in an interview with Blockworks


Crypto markets were largely the only ones open over a tense weekend, and they took a beating for it