The COVID-19 pandemic has served as an X-ray of the current vulnerabilities of the global financial system and an accelerator of destabilizing trends, including rising government and consumer debt in emerging markets. At an online meeting of the Club of Central Bankers hosted this week by Bank of Russia Governor Elvira Nabiullina, representatives unanimously agreed on their expectations for the far-reaching consequences of the current crisis.
At the meeting, 26 representatives of central banks from Central Asia, the Black Sea region, the Balkans and other countries mentioned the expansion of e-commerce caused by the epidemic, as well as digital settlement methods. From a central bank’s perspective, these trends are prompting financial regulators to take central bank digital currencies more seriously than ever before.
The vast majority of central banks around the world have reportedly already engaged in some form of CBDC action, and this growing interest is reflected in the continued escalation of official rhetoric on the issue since 2016.
At a subsequent meeting of the Central Bankers’ Club, hosted by the Deputy Governor of the Bank of Russia Alexei Zapotkin, representatives discussed strengthening the proactiveness of financial regulators on the currency front of the central bank during the pandemic.
Summing up the results of the meeting prepared by the Bank of Russia, the participants agreed on the need to assess the potential impact of the central bank’s digital currencies on the monetary policy and financial stability of countries, as well as develop measures to reduce cyber risks.
It is reported that the meeting took place not only with the governors of central banks from the CIS countries, Israel and China, but also with representatives of the International Monetary Fund and the World Economic Forum, as well as the Bank for International Settlements.
The latter has been involved in the global development of the Convention on Biological Diversity and has made an accurate analysis; The International Monetary Fund, for its part, has partnered with several central banks in their joint research on central bank digital currencies, while the World Economic Forum recently focused on developing a framework for a central bank digital currency from transnational governance. perspective. …
In addition to the challenges faced by central bank digital currencies in international cooperation, standards, monetary policy, and technical compatibility, China’s strong dominance in developing central bank digital currencies – given its advances in the digital yuan – has also increased geopolitical risk for global investors. … … The financial system, especially the United States.