BIS’ Carstens: “Digital currencies and the future of the monetary system”
Agustín Carstens, general manager of Bank for International Settlements (BIS), in a speech to Hoover Institution affiliates, Stanford University faculty and students on 27 January 2021, addressed the digitisation of money and the implications of central bank digital currencies for the monetary system.
January 28, 2021
| Agustin Carstens
It is stating the obvious that our economy is in the middle of a technological revolution. A combination of new digital technologies and greater online activity allows huge volumes of data to be collected, managed and telecommunicated. This has dramatically lowered the costs of many tasks. It has resulted in powerful, hyper-scalable applications that have disrupted entire industries – everything from taxis to print media. New players have entered the digital economy to provide these services. While advances in information technology and communications have been under way for many decades, the past decade has ushered in truly far-reaching changes. The COVID-19 pandemic may have further accelerated the pace of digital change.
The technological revolution has also reached the financial system – and even the design of money itself. Just to name one example, on primary foreign exchange (FX) venues, market-makers can now access real-time prices at five-millisecond time intervals. Project Rio, a new application for monitoring fast-paced markets developed at the BIS Innovation Hub, allows the entire market order book to be monitored every 100 milliseconds, or 36,000 times every hour.
The first point of entry into finance is the market for payment services, which are foundational to all economic activity. Payments are attractive for ...
Please login to read the complete article. If you already have an account, you can login
Keywords:Central Bank Digital Currencies, Cryptocurrencies, Project Rio, Real-time Gross Settlement Systems (rtgs), Unified Payment Interface (upi), Codi, Pix, Fednow, Stablecoins, Libra, Diem, Sand Dollar Project, Bahamas, Distributed Ledger Technology