Scope 1 Interoperability of CBDCs is important, regardless of whether they are implemented in all regions. CBDC issuance and design are sovereign decisions to be made by each jurisdiction. The scope of this deliverable assumes that some countries may adopt CBDCs in the future but is agnostic as to whether a CBDC is implemented. This piece of work does not advocate for or take a position on the need for a CBDC. It discusses the considerations that need to be undertaken in the event that a CBDC is issued (either wholesale, retail or both). The focus includes ensuring that any CBDC is interoperable with domestic payment options. As for crossborder payments, it is also important to ensure interoperability with other countries that choose to issue a CBDC.1 1.1 Definitions Interoperability There are existing definitions of interoperability framed by the Bank for International Settlements (BIS),2 the World Economic Forum3 and various other institutions.4 The definitions used in this paper are consistent with these organizations. Interoperability for central bank digital currency means interoperability, from both a domestic and cross-border viewpoint, with various types of payment systems, technical standards, regulatory standards and legacy payment architecture and infrastructure.5 Interoperability allows participants in different systems to conduct, clear and settle payments or financial transactions across systems without participating in multiple systems.6 CBDC CBDC is a direct central bank liability and “a digital form of central bank money that is different from balances in traditional reserve or settlement accounts”.7 Retail CBDC: A form of central bank digital currency that is accessible to the public and could be used domestically or cross-border. Retail CBDCs are sometimes also referred to as general purpose or universally available CBDCs. Wholesale CBDC: A form of central bank digital currency that would be used among banks and other licensed financial institutions for interbank payments and securities transactions. Wholesale CBDC could be used both domestically and cross-border. Central Bank Digital Currency Global Interoperability Principles 6
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