Executive summary Central banks have different motivations for exploring or developing central bank digital currency (CBDC), and the demand for improved domestic and cross-border payment rails differs across jurisdictions. To help central banks in the planning and development of their CBDCs and to make sure that interoperable functionalities are considered in time, the central bank community should take steps at the beginning of the design process to include these considerations. Although this paper does not take a stance on the choice to issue a CBDC, it considers interoperability in a global future state where a CBDC may exist. Based on the input of the Forum’s Digital Currency Governance Consortium (DCGC) CBDC Regional Roundtable series and multistakeholder input, this paper analyses CBDC from a regional perspective to draw unique elements that would impact CBDC design in each jurisdiction. Based on these regional perspectives, there were several elements that were aligned among countries and regions, including: – Trust in the payment instrument – Promoting innovation – Financial inclusion – Monetary and economic stability – Payment efficiency and security – Regulatory compliance and financial integrity – Privacy and data protection – Cybersecurity and resilience – User experience and accessibility – Offline capabilities – Cross-regional cooperation – Public-private cooperation – Interoperability and standards. In addition, since the commencement of CBDC pilots and experimentation, there were lessons learned that are relevant globally. These included having a clear reason to pursue CBDC, having strong reasoning for the underlying technology choice, alignment with regulatory frameworks, ensuring integration with other payment solutions, prioritizing user experience and accessibility, building public confidence and trust in the CBDC, building the CBDC with public-private cooperation and prioritizing interoperability. When considering CBDC interoperability, there are a few key areas that require additional attention. This includes monetary sovereignty, financial stability, geopolitical risk, de-dollarization and infrastructure cost considerations. Based on all prior input, there arise a set of principles for CBDC interoperability. There are generally applicable principles such as the need for standardization, openness and inclusivity, scalability, resilience and redundancy, and crossborder integration. Additional principles are grouped by governance, legal and regulatory, identification and authentication, payments, and technical. Thus, the recommendations for central banks are to foster public-private cooperation, engage in thought leadership and advocacy, and education and awareness on CBDCs. For policy-makers, there is a recommendation to aim for regulatory consistency, participate in international forums and foster innovation and research in CBDC. For the private sector, there should be greater participation in regulatory sandboxes and innovation hubs, interoperability testing and pilots, and participation in standards development. For financial market infrastructure players, there should be a focus on interoperable clearing and settlement systems, standardization of messaging formats, and sharing insights from interoperability work. These principles can provide a foundation for interoperability with CBDCs. There is a call to action to continue this conversation and form a set of standards that can be applied readily and overseen and enforced by an agreed-upon entity. Central Bank Digital Currency Global Interoperability Principles 4
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