The central banks of Japan, Canada, and some of the European Union members are teaming up to study the prospects of launching centralized digital currencies in their respective countries.
The Bank of Canada, the Bank of England, the Bank of Japan, Switzerland's Swiss National Bank (OTC: SWZNF), and Sweden's Sveriges Riksbank are teaming up with the European Central Bank, and the Bank for International Settlements (BIS) have created a group to share their experience and study the use cases of the so-called central bank digital currency (CBDC), the banks said in a joint statement on Tuesday.
The group will study the economic and technical aspects of such currencies and look into their implications for international transactions, the financial institutions said.
The banks will also coordinate with other relevant international bodies and forums, in particular, with the Switzerland-based Financial Stability Board and the BIS's Committee On Payment And Market Infrastructures (CPMI).
The group will be co-chaired by French economist Benoît Cœuré, Head of the BIS Innovation Hub, and Bank of England Deputy Governor Jon Cunliffe, who also chairs the CPMI, the statement said.
Why It Matters
The grouping together of the institutions comes at a time when the race for launching centralized cryptocurrencies has fastened.
The People's Bank of China, which has been reportedly working on its CBDC project for more than five years, recently started trialing its digital currency.
The Chinese bank itself caught pace in light of the Facebook Inc.-led (NASDAQ: FB) Libra cryptocurrency project that could potentially launch in 2020 if it manages to clear the umpteen regulatory hurdles facing it.