digital currencies

The Bank for International Settlements (BIS) issued a report about the results of a survey run among central banks with regard to the use of CBDCs as a means for international transactions beyond borders. The key points are the following:
– Increasing the usage of a foreign currency CBDC in a specific jurisdiction may replace the use of the domestic currency for payments and financial transactions;
– CBDCs could facilitate tax avoidance and a loss of domestic oversight capabilities or raise a range of concerns associated with “digital dollarisation” if authorities had only a limited overview of CBDCs’ transactions’ volume;
– CBDCs may lead to a volatility in exchange rates if flows between domestic currencies and a foreign CBDC were not set up in the correct way;
– There are currently three different CBDC models: enhanced compatibility, interlinking CBDC systems, integration into a single system.

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