Director of BIS Innovation Hub: COVID-19 reveals the value of DLT

Benoît Cœuré, director of the Innovation Hub at the Bank for International Settlements, recently said that central bank digital currencies, or CBDCs, crypto, have been “highly centralized.” amid the corona pandemic.

On April 17, speaking during a webinar organized by Accenture, the Bretton Woods ReReinventing Committee and the Chamber of Digital Commerce, Cœuré said that “the crisis has revealed the value of technologies that have the potential to help the industry. economic expansion of its activities”.

He also revealed that the Bank for International Settlements (BIS) is looking into tokenization or crypto as a possible solution, to restart some segments of the economy during the lockdown period because of Covid-19.

Corona pandemic reduces cash consumption

The head of Innovation Hub highlighted the decline of cash payments during the Covid-19 pandemic, and affirmed that the current economic situation creates a lot of discussion around CBDCs:

“Central bank digital currency is being discussed. Whether Covid-19 will accelerate the disappearance of cash remains an open question. However, the value of having access to a variety of payment methods, and the importance of all means of payment, is clear, especially in the face of many threats.”

Cœuré points out that “the payments sector has been at the forefront of recent technological innovations, a rapid shift to electronic payments that could improve costs, transparency, and convenience for billions of consumers.” .”

Don't miss the following: The Federal Reserve's balance sheet expands at a record pace

BIS assesses the trend of DLT in the post-lockdown financial picture

However, Cœuré asserts, “Covid-19 will accelerate the digital shift beyond the payments sector.” He wondered: “Will customers return to bank branches when the blockade order is lifted and the economy restarts? Will this lead to a shift to online banking?” With this in mind, Cœuré said the BIS Innovation Hub will continue to examine “technological trends in the financial industry” and their impact on central banks and regulators.

“Things like tokenization, open banking, and the use of technology to support regulatory compliance and oversight are being prioritized in our program.” He shared more.

At the beginning of April, prime xbt released a newsletter stating that CBDCs can reduce the risk of coronavirus transmission through paper money. Even so, the report notes CBDCs may not reach the elderly and unbanked.