The COVID-19 pandemic provided an X-ray of the existing problems in the global financial system as well as an acceleration of destabilising trends, including the growth of sovereign debt and consumer debt in emerging markets.
At this week’s online meeting of the Club of Central Bank Governors, organised by Bank of Russia Chairman Elvira Nabiullina, representatives were unanimous in their views on the expected consequences of the current crisis.
At the meeting, 26 central bank representatives from Central Asia, the Black Sea region, the Balkans and other countries noted the intensification of e-commerce as well as the development of digital settlement technologies. From the perspective of central banks, these trends are encouraging financial regulators to take digital currencies of central banks more seriously than ever before.
The vast majority of central banks around the world have already participated in some form or other in the work on the CBDC, and this growing interest is reflected in the constant growth of official statements on the subject.
At a subsequent meeting of the Club of Central Bank Governors, organised by Bank of Russia Deputy Chairman Alexey Zabotkin, CBDC representatives discussed the increasing activity of financial regulators on the CBDC.
After a brief presentation by the Bank of Russia, participants agreed on the need to assess the potential impact of the CBDC on monetary policy and financial stability of states, as well as the need to develop procedures to reduce cyber risks.
It is reported that the meeting brought together not only heads of central banks of CIS countries, Israel and China, but also representatives of the International Monetary Fund and the World Economic Forum, as well as the Bank for International Settlements.
The latter took part in global developments of CBDC and conducted a detailed analysis of them. The IMF, in turn, has collaborated with several central banks in joint CBDC studies, while the WEF has recently focused on developing the CBDC framework from a transnational governance perspective.
Along with the challenges that the CBDC presents for international cooperation, standards, monetary policy and technical compatibility, China’s great advantage in developing the CBDC has increased geopolitical tensions for major players, including the US.