Outdated legal frameworks are holding the world back from issuing much-needed Central Bank Digital Currencies (CBDCs) according to Agustín Carstens, General Manager of the Bank of International Settlements (BIS).
During a speech in Switzerland on Wednesday, the banking chief extolled the benefits that CBDCs could provide the global economy while pleading for world leaders to evolve their laws to accommodate them.
“People want their money to be digital and programmable,” explained Carstens. “They want to be able to transfer it across borders quickly, cheaply, and safely.”
While private market cryptocurrencies (e.g. Bitcoin) feature both digitality and programmability, the BIS chief said such currencies can’t be money without the backing and protection of the central bank, among other things.

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Federal Reserve Vice Chair for Supervision Michael Barr has voiced concerns over the digital assets which largely serve as the backbone of the crypto economy: stablecoins. Barr said Friday at a Federal Reserve Bank of Philadelphia event that he was “deeply concerned” about stablecoin issuance without oversight from authorities. The central bank bigwig also said that the Fed had still made “no decision” on releasing a central bank digital currency (CBDC)—centralized digital assets controlled by...
Stablecoins also fail to meet the bill, in his view, since their stability cannot be guaranteed. Indeed, leading stablecoins like Circle’s USDC have lost their peg to the dollar as recently as this year. And last year Terra’s UST stablecoin collapsed completely.
By contrast, Carstens claimed that wholesale CBDCs (used by the banking system) have “vast potential in the areas of automation and risk mitigation,” while retail CBDCs could deepen financial inclusion and make cross-border payments faster and cheaper.
“A retail CBDC… could exist alongside cash, offering the public a digital alternative to banknotes and coins,” he added.
Back in 2021, the International Monetary Fund (IMF) found that nearly 80% of central banks are either legally barred from issuing CBDCs, or are governed by unclear laws on the matter.
“It is simply unacceptable that unclear or outdated legal frameworks could hinder their deployment,” Carstens said. “The work to address these issues needs to begin in earnest. And it needs to proceed at pace.”
A CPMI survey last year found that 93% of central banks are already working on CBDCs in some capacity, with more than half working on a pilot, or engaged in concrete experiments.

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As with digital assets at large, support for CBDCs runs down partisan lines in U.S. Congress—but counter to the way the parties have embraced cryptocurrencies. Democrats are more open-minded to their deployment, while Republicans want them banned entirely.
The latter party largely views CBDCs as a state surveillance tool that will be used to track citizens’ everyday purchases. In his speech, Carstens asserted that legal frameworks on CBDCs must focus on privacy as a “core element.”
Carsten clarified that it is ultimately up to each jurisdiction to decide whether CBDC issuance is appropriate.
“It would be unfortunate if we ended up with a fragmented system and legal framework in which different digital currencies don't interoperate,” he concluded.