By Sam Bridge
Bahrain Central Bank governor says it will trial a new toolkit developed by the World Economic Forum
Bahrain's Central Bank is to pilot a new toolkit developed by the World Economic Forum to evaluate the impact of digital currencies on the economy.
Blockchain and academic experts from around the world have contributed to the design and content of the toolkit to help policy-makers within central banks confidently evaluate whether central bank digital currency (CBDC) is the right fit for their economy and guide them through the evaluation, design and deployment process.
“We will pilot the new toolkit developed by the World Economic Forum, said Rasheed Al Maraj, governor, Central Bank of Bahrain.
“We hope that it will be an opportunity to learn, grow and to adapt to the changes in the Fourth Industrial Revolution.”
The past six months have been a wake-up call for some central bank policy-makers. CBDC has risen to prominence as a potential solution to multiple challenges such as financial inclusion and payment-system efficiency.
But due in part to the market-moving nature of central bank announcements, the majority of research and experimentation is done independently, behind closed doors.
For the first time, the World Economic Forum has gathered insights from central bank researchers, global policy makers, international organizations and experts from over 40 institutions to create the CBDC Policy-Maker Toolkit.
“Given the critical roles central banks play in the global economy, any central bank digital currency implementation, including potentially with blockchain technology, will have a profound impact domestically and internationally,” said Sheila Warren, head of Blockchain and Distributed Ledger Technology at the World Economic Forum. “It is imperative that central banks proceed cautiously, with a rigorous analysis of the opportunities and challenges posed.”
“We worked with almost a dozen central banks as well as prominent economists and financial industry leaders to create a common approach for evaluating and designing CBDC around the world,” added Ashley Lannquist, project lead at the World Economic Forum. “The toolkit is the first of its kind to provide a concise summary of the key issues for policy-makers considering general-purpose or wholesale CBDC.”
The CBDC Policy-Maker Toolkit provides high-level guidance and information for retail, wholesale, cross-border and private-sector issued “hybrid CBDC” as well as for large, small, emerging and developed countries.