Agustín Carstens, General Manager of the Bank for International Settlements (BIS), has positively evaluated the Central Bank Digital Currency (CBDC) pilot project being advanced by the Bank of Korea and financial authorities. During a seminar titled ‘CBDC Future Monetary Systems’ at the Bank of Korea, Carstens referred to the project as the ‘Digital Won’ and stated that it aligns well with the vision of future monetary systems.
He mentioned that CBDCs, as new financial market infrastructures, should become public goods. The government should facilitate the tokenization of a broad range of assets and address extensive governance and legal challenges. He pointed out that laws in most countries limit central banks from issuing currencies and often do not permit or are uncertain about the issuance of CBDCs.
Carstens highlighted the importance of resolving governance issues related to bringing monetary and non-monetary claims onto a single programmable platform. He stated that more ambitious goals are needed, aiming for the tokenization of claims on financial and physical assets like government bonds, stocks, and real estate registries. He emphasized the importance of connectivity and interoperability among digital asset networks.
Carstens predicted that the use of CBDCs could provide convenience, immediacy, privacy, security, and reliability similar to e-commerce transactions on smartphones. He proposed the concept of a ‘unified ledger’ as a common platform that would allow various components of the financial system to operate smoothly together.
Finally, he stated that central banks, financial authorities, and governments should lead the construction of new infrastructure. Central banks should rapidly develop programmable institutional CBDCs, financial authorities should facilitate the digitalization and tokenization of commercial bank deposits, and governments should encourage the tokenization of various asset classes.
The Bank of Korea and the government commenced experiments last month to test the usability of CBDC in real financial transactions, with general financial consumers expected to participate by the end of next year.
