Principles for CBDC interoperability CBDC interoperability encompasses standardization, robust scalability, resilience, collaboration and inclusivity across borders. 5 CBDC interoperability refers to the ability of different CBDC systems to seamlessly interact and transact with one another. While there is no universally agreed-upon framework for CBDC interoperability, several foundational principles can guide its development. These principles include both ones that are widely applicable to interoperability and also specific principles for interoperable governance, legal and regulatory regimes, identification and authentication arrangements, various payment systems, and technical solutions. As a next step, these principles can provide a foundation for the creation of an agreed-upon set of CBDC interoperability standards. There are several standard-setting initiatives underway including the Digital Currency Global Initiative (DCGI), hosted by the International Telecommunication Union (ITU) to study the requirements for technical standards for central bank digital currency and stablecoins. There are three working groups on policy and governance, architecture, interoperability and use-cases, and security. This initiative, alongside others, should ensure a multistakeholder approach to confirm agreement and identify the organization that will have oversight and enforcement of these standards. Generally applicable principles TAB L E 9 Principle Description Standardization Establishing common standards across CBDC systems can facilitate interoperability. Adopting international standards can enhance compatibility and ease of integration. Openness and inclusivity Interoperability should promote inclusivity by enabling open participation from various stakeholders. Scalability CBDC interoperability should be designed to handle a large number of transactions and support future growth. The underlying infrastructure and protocols should be scalable and accommodate increased demand without compromising efficiency or security. Resilience and business continuity Interoperability systems should be resilient to disruptions and capable of maintaining operations. DLT could be a method used to enhance system reliability and minimize single points of failure. Stakeholder collaboration Collaboration between central banks, regulatory bodies, financial institutions, technology providers and industry stakeholders is essential for creating an interoperable CBDC ecosystem. Engaging in partnerships, standardization efforts and pilot projects can facilitate the development of interoperability frameworks and drive innovation in crosssystem transactions. Cross-border integration CBDC interoperability should address cross-border transactions, facilitating seamless transfers and exchanges between different CBDCs. Interoperability frameworks should consider foreign exchange regulations, settlement procedures and mechanisms to enable efficient cross-border transactions while maintaining compliance. Central Bank Digital Currency Global Interoperability Principles 28
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