The general manager of the Bank of International Settlements (BIS) Agustín Carstens during a speech in Switzerland on Legitimacy, Privacy, Integrity, Choice: Towards a legal framework for central bank digital currencies at the BIS innovative hub finance stability conference points out the need for world governments to see the need for incorporating CBDC'S as a core monetary system for both retail and wholesale day to day transactions.
People want their money to be programmable and digital so they can have a cheap fast and borderless transactions experience across globe all this feature are the benefits of central bank digital currencies according to BIS general manager. He went further to expand the key role of central banks as a key player in building trust among users as they control and regulate the payments system and drive world economy by controlling unit of accounts they provide emergency liquidity funds and prevent bank run solvency they are the defenders of money value and ensure there's stability of issuance of money across borders.
But, legal framework have been a big barrier hindering wide adoption and acceptance of CBDC'S as this laws continue to restrict further development of centralized digital currencies across the globe.
Outdated legal frameworks are holding the world back from issuing much-needed Central Bank Digital Currencies (CBDCs) according to Agustín Carstens,
Regulatory legal framework isn't just narrowed down to slowing down decentralized currency adoption it is also limiting expansion of CBDC'S adoption which need to be addressed if the world at large want to see its adoption at faster pace surpassing other decentralized digital currency like bitcoin and ethereum, according to Carstens decentralized token can not be legally accepted money since they are not backed and protected by central banks, the case of terra UST and other stablecoins losing their peg makes crypto based stablecoin and decentralized digital assets unstable as their price stability can't be guaranteed.
Are CBDC'S private
Legal frameworks on CBDCs must focus on privacy as a “core element.”
Or it should be best stated otherwise can CBDC'S be private? Pretty sure this could be another metaphorical statement which isn't going to happen any time soon in the future, every central bank issued digital assets is somehow tracked they are surveillance featured, design to track every users transactions.
While the long press statement virtually highlights the importance of central banks notes and the role of CBDC'S it all focused on Control which central banks have over users transactions and world economy, neglecting the idea of decentralization it's so obvious that centralized system and their issued digital currencies will not give users flexibility over complete use of their assets without been watched.
I guess legal framework wouldn't want to compromise privacy for control of users assets these are two different things and the law will always choose control over privacy of user assets, every world governments want to have its people closely watched since there have always been cases of money laundering and theft the case of focusing on user privacy will be reversed for control over users transactions.
It will still be quite challenging for central bank digital currencies to witness massive adoption at fast pace because of it none privacy features that track transaction of users I guess this is why BIS manager wanted legal framework to implement privacy feature on CBDC'S so as to attract more users, although they can be forced to be used as legal tender for most countries but the idea of making privacy a priority seem quite farfetched.
I don't see how in long term CBDC'S legal framework can be focus on privacy as this will totally disrupt the idea at which they are introduced at the first place although for the average users who care less about surveillance they don't have problem using CBDC'S for their transactions CBDC'S going private on users transaction means they are embracing decentralized which will equally boost adoption of most privacy based decentralized currencies which I see not happening.