The World Economic Forum’s Centre for the Fourth Industrial Revolution Network has built a global community of central banks, international organizations and leading blockchain experts to identify and leverage innovations in distributed ledger technologies (DLT) that could help usher in a new age for the global banking system.
By bringing these stakeholders together through a common initiative, we have enabled them to share their latest research and insights quickly, promoting transparency, trust and collaboration in a space that has traditionally lacked all three.
We are now helping central banks build, pilot and scale innovative policy frameworks for guiding the implementation of DLT, with a focus on central bank digital currencies (CBDCs). DLT has widespread implications for the financial and monetary systems of tomorrow, but decisions about its use require input from multiple sectors in order to realize the technology’s full potential.
What's the challenge?
Blockchain and DLT can potentially transform banking by improving efficiency, security and financial inclusion. Central banks around the world have been exploring DLT, but often independently, which in some cases has led to the duplication of efforts and uneven progress. Like many other organizations, central banks have also found it challenging to stay ahead of the latest developments in the rapidly evolving field of DLT and digital currencies. Meanwhile unilateral efforts to implement DLT by the private sector have largely neglected opportunities to make better use of it in the public sector.
Tackling these challenges can be difficult in an industry where the key players are cautious about sharing information, and where a single decision could have far-reaching consequences for financial markets and entire economies. The independence and neutrality of the Forum offers a unique atmosphere of trust, where these central banks can come together to collaborate.
The Central Banks in the Age of Blockchain initiative has created the world’s first community for central banks to share experiences, ideas and best practices related to DLT and digital currencies, and to learn from reliable blockchain experts. Our global community currently consists of 45 (and counting) central banks, four major international organizations and some of the world’s top blockchain experts. They connect with each other through monthly webinars, in-person workshops in various locations around the world, online discussions and joint research projects.
To keep our community members up-to-date on the latest developments in blockchain, DLT and digital currencies, we publish white papers and insight reports, including Central Banks and Distributed Ledger Technology: How are Central Banks Exploring Blockchain Today?, which publicly shares insights from dozens of blockchain experiments by central banks for the first time.
In addition, our Centre’s Blockchain and DLT team maintains the world’s most extensive public list of papers written by central banks and macroeconomists on central banking and DLT – a crucial resource for central banks looking to find all the latest information in one place.
We are now working with this community to create a policy framework that helps central bank officials determine whether and how to issue CBDCs. This toolkit will highlight key issues and risks, along with some practical guidelines to ensure responsible deployment. It will be the first of its kind and will take a research-driven, multi-dimensional and risk-aware approach to guiding policy-makers on decisions regarding CBDC. The toolkit will be piloted by central banks in the community who are interested in issuing their own digital currencies.
We’re also connecting our community of central banks with leading creators of new cryptocurrencies and blockchain-based digital currencies so they can work together to address legal and regulatory challenges arising from these financial innovations and help ensure the benefits extend to all parts of society.
“Over the next four years, we should expect to see many central banks decide whether they will use blockchain and distributed ledger technologies to improve their processes and economic welfare. Given the systemic importance of central bank processes, and the relative freshness of blockchain technology, banks must carefully consider all known and unknown risks to implementation.”