Central Banks Should Allow Salaries, Social Transfers to be Paid in CBDCs – BIS
Why Trust Cryptonews
Ad Disclosure
We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more
The Bank for International Settlements (BIS) and seven central banks propose to incentivize consumers to use central bank digital currencies (CBDCs) by enabling social transfers and payments of salaries through these digital currencies.
In a report, the banks claim that CBDCs could best meet users’ future needs through developing interoperable systems that foster private innovation, all the while preserving public trust.
The BIS worked on the papers in cooperation with the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, US Federal Reserve, Sweden’s Sveriges Riksbank, and the Swiss National Bank. The studies analyze policy options and practical implementation issues related to retail CBDCs, the BIS said in a statement.
Among some of the recommendations included in the report number 3, titled Central bank digital currencies: user needs and adoption, the banks remind that consumers who obtain payments in CBDC may be more likely to use CBDCs.
“Public authorities might therefore be able to incentivize consumer use of CBDC by disbursing social benefits and transfers to individuals in CBDC and allowing employees to receive their salaries in CBDC. Allowing consumers to pay their taxes in CBDC may also provide a stable, concrete example for consumers to use CBDC,” the paper said.
To encourage consumers to use CBDCs, central banks must ensure their safety and security in a convenient form that could be easily integrated into private sector products and services, according to the report.
“As central bank money, CBDC would be the safest form of money available,” the banks argued, without mentioning decentralized money, such as bitcoin (BTC), that can’t be controlled or devalued by central banks or governments.
Some other features that a CBDC might offer, they continued, include offline payments, a lower cost to consumers and merchants, a higher level of privacy compared to commercial options, and a design with “multiple accessibility features.”
On the merchant side, they argue, sellers are interested in new payment instruments that could expand their customer base, that are used by an extensive pool of consumers, or that are cutting their costs of transacting with respect to the payment methods they currently accept.
Additionally, legislators could consider obliging some minimum level of acceptance of CBDCs. For instance, some government entities such as tax authorities, healthcare providers, and pharmacies could be required to accept such currencies, the banks argue.
“This would ensure that consumers in these jurisdictions could use CBDC to satisfy some basic, but important needs,” said the report. However, it also noted that other jurisdictions “may consider such an imposition overreaching and would choose not to force private businesses to accept CBDC.”
Headquartered in Basel, Switzerland, the BIS says it is jointly owned by the world’s 62 central banks, representing countries that together represent some 95% of the global gross domestic product (GDP).
____
Learn more:
– Multiple CBDC Platform May Cut Int Payment Costs By Up To Half – BIS
– Central Banks Look To Two-Tier Retail CBDC Model Amid Disruption Fears
– CBDC: A Solution in Search of a Problem?
– Expert Warns CBDCs Won’t Carry the Same Advantages as Bitcoin
– ECB Starts Digital Euro Project With Two-Year Investigation & Bitcoin Bashing
– Ripple Says it Will Pilot a CBDC for Bhutan
- Trump Appoints PayPal Veteran David Sacks as ‘White House AI and Crypto Czar’
- New TRUMP Meme Coin Could hit $100 Billion Market Cap By Inauguration Day, But is It For Real?
- Trump Meme Coin’s Market Cap Loses $6B in Value Before His Swearing-In
- Trump’s World Liberty Saw Token Sale Surge with 230% Price Hike Amid Massive Demand
- Trump Promotes Solana Meme Coin Days Before Inauguration, Sparking Hacking Concerns
More Articles
in numbers
