Full general manager at the Bank for International Settlements (BIS) Agustin Carstens seems to have inverse his negative stance towards primal bank digital currencies (CBDCs), now stating that such currencies could open upwardly new possibilities.

In his speech entitled "The future of money and the payment arrangement: what office for central banks?" published on December. 5, Carstens dug into central banks' approach to emerging technologies in regards to building more than efficient and inclusive financial systems.

Wholesale and retail CBDCs

Carstens said that the introduction of retail CBDCs — which are available to the general public, including businesses and consumers — could bring serious changes to the financial sector by opening upwardly new possibilities when it comes to the 24/7 availability of payments, different degrees of anonymity, and peer-to-peer transfers.

He continued noting that wholesale CBDCs — where the network participants are financial institutions — could exist made compatible with the provision of central bank settlement liquidity. Wholesale CBDCs would non raise difficult financial footprint issues equally they would be largely restricted to institutions that already use fundamental bank deposits, co-ordinate to Carstens.

Dissimilar wholesale CBDCs, retail versions would raise a range of concerns such every bit the designation of entities  responsible for the enforcement of know-your-customer and anti-money laundering regulations, Carstens outlined.

CBDCs' negative affect on the financial system

In late March, Carstens was not so positive about CBDCs, when he brash confronting the issuance of such currencies. Carstens argued then that a CBDC could facilitate a bank run, enabling people to motion their funds from commercial banks to central banking company accounts faster, thus destabilizing the system.

At the time, he also noted that there are enormous operational consequences for the fundamental bank in the implementation of budgetary policy and the traditional market's stability.Carstens stated: "Cardinal banks do not put a restriction on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic conditions."

Meanwhile, a number of countries are exploring the issue of the evolution of a digitized national currency, including China, France and Ghana, among others.