The economic crisis caused by the pandemic has accelerated some trends, such as the spread of e-commerce and interest in digital currencies.
The COVID-19 pandemic highlighted vulnerabilities in the global financial system and accelerated destabilising trends, including rising debt in emerging economies. During an online meeting of the Central Bank Governors‘ Club, moderated this week by Elvira Nabiullina, Governor of the Bank of Russia, participants expressed unanimous views on the long-term consequences of the current economic crisis.
During the meeting, the 26 central bank representatives from Central Asia, the Black Sea region and the Balkan countries also highlighted the positive effects the pandemic has had on e-commerce and digital settlement technologies. From a central bank perspective, these trends are driving regulators to take Central Bank Digital Currency more seriously than ever before.
The vast majority of central banks around the world are already studying and developing some form of CBDC: the growing interest is also reflected in the ever-increasing number of official speeches addressing the issue.
In October this year, Nabiullina stressed that a possible Russian digital rouble will not have the same level of anonymity as cash:
„However, we should not confuse anonymity with the confidentiality of digital rouble transactions. In fact, there will not be the same level of anonymity made possible by cash transactions. But confidentiality will be enhanced.“
In a follow-up meeting at the Central Bank Governors‘ Club, this time moderated by Alexey Zabotkin, vice-governor of the Bank of Russia, participants agreed on the need to assess the potential impact of CBDCs on the monetary policies and financial stability of states, as well as to develop procedures to mitigate possible cyber risks.
During the meeting, not only central bankers from the Commonwealth of Independent States, but also from Israel and China, as well as representatives from the International Monetary Fund, the World Economic Forum and the Bank for International Settlements were invited.
In the past, the Bank for International Settlements has carried out numerous studies on the global development of CBDCs and has collaborated with several central banks in the research of this financial instrument. The World Economic Forum has recently focused on the development of regulatory frameworks from a transnational governance perspective.