Swiss central bank, BIS plan to test digital currency by the end of this year
October 26, 2020, 7:36AM EDT
1 min read
The Swiss National Bank (SNB) and the Bank for International Settlements (BIS) plan to test a central bank digital currency (CBDC) by the end of this year.
BIS official Benoit Coeure revealed the plan on Sunday at the Bund Summit held in Shanghai, as reported by the Chinese news outlet The Paper. Coeure said the Swiss central bank and the BIS would issue a CBDC "in the proof-of-concept stage" by the end of 2020.
This proof-of-concept will pave the way for experimenting with retail CBDC, according to Coeure, who heads the BIS Innovation Hub that is researching digital currencies. It will also help explore connections to existing payment systems and monitor compliance, said Coeure.
Looking ahead, the BIS also plans to work with more central banks, including the Hong Kong Monetary Authority and the Bank of Thailand, to test cross-border usage of digital currencies, said Coeure.
The SNB and the BIS first partnered in October 2019 to explore a blockchain-based digital currency. At the time, the SNB said: "This new form of digital central bank money would be aimed at facilitating the settlement of tokenized assets between financial institutions."
Earlier this month, the BIS and a group of seven central banks, including the SNB, published a comprehensive report on how a digital currency should be designed. They said a CBDC would need to coexist with and complement existing forms of money, and a central bank should not compromise monetary or financial stability by issuing a CBDC.