As central banks dabble with digital currencies, commercial lenders are ramping up efforts to influence policy and technical plans, according to more than half a dozen industry executives and public filings.
Worried that the explosion in cryptocurrencies could weaken their grasp on the economy, monetary policymakers from Washington to Beijing are exploring issuing their own central bank digital currencies, or CBDCs.
Although a widely used digital dollar, euro or yuan may still be years away, such projects threaten to disrupt the financial services industry – galvanizing banks into action.
“CBDCs start a debate on the very essence of money that could have a big impact in almost everything we do, from securities processing to settlement,” said Swen Werner, managing director for digital assets at State Street.
Depending on the design, CBDCs might see central banks and tech players compete in the retail banking space while giving incumbents opportunities to cut costs and improve services.