FEATURE
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Crypto Weekly
International Digital Currencies Are in Our Future Financial institutions are able to transact directly with one another using a central bank's digital currency.
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n recent years, international financial authorities have developed prototype platforms for digital currencies backed by central banks that may be incorporated into the worldwide monetary system, raising hopes for the possibility of digital dollars. It was announced that the Bank for International Settlements (BIS) has developed two preliminary platforms for facilitating international settlements using digital currencies issued by multiple central banks. In addition to the US Federal Reserve, a collection of central banks own the BIS, referred to as a bank for central banks. Australia, Singapore, Malaysia, and South Africa collaborated on its innovation in digital dollar settlements. Using central bank digital currencies on a shared platform, "Project Dunbar" has shown that financial institutions can transact directly with one another. By eliminating intermediaries, cross-
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border transactions would be less expensive and faster. In a statement, Andrew McCormack, the head of the BIS innovation hub in Singapore, said, "Project Dunbar demonstrated the value of governance mechanisms enforced
by robust technology, laying the foundation for developing future global and regional platforms." In the fast-growing digital asset space, decentralized and volatile crypto assets like Bitcoin and Ether have received much attention, but central banks are catching up. Several financial authorities, including those in the U.S. and the U.K., are exploring the possibility of digitizing their national currencies. President Joe Biden recently discussed the rapid growth of cryptocurrencies and detailed a national policy for handling digital assets. The White House has called for exploring a US digital dollar with "urgency on research and development." What I am saying here is that the groundwork is being done. Platforms are being tested. No one knows when, but digital currencies managed by central banking and the nation-states that control them are only a matter of time.
April 2022 | Volume 21
