IRSG Report – The Use of Central Bank Digital Currencies (CBDCs) in Wholesale Markets

Published 8 Jul 2022

There is accelerating momentum behind the development of CBDCs. Many central banks are exploring whether and how to establish CBDCs and some have already done so. And, there are many benefits to the inclusion of CBDCs in the current payments landscape, including broader accessibility, better record keeping and making payments more efficient. But what legislative and regulatory considerations should be there to enable a globally interoperable CBDC for cross-border payments in the wholesale space?

With this report, the International Regulatory Strategy Group, in partnership with Clifford Chance LLP, seeks to answer this question. Through discussing a number of CBDC use cases, namely, retail CBDCs from a wholesale perspective, CBDCs for securities settlement and CBDCs for FX transactions, the report examines how regulatory and legislative frameworks can enable a globally interoperable wholesale CBDC.

The report identifies a number of recommendations, underpinning how jurisdictions and practitioners can progress the development of CBDC regulatory frameworks in the wholesale space over the next couple of years. These are: the development of global regulatory principles for globally interoperable wholesale CBDCs; the establishment of a high-level expert group on CBDCs; jurisdictional initiative to implement the framework; as well as regulatory deference.