Manuel Klein, product manager, blockchain solutions and digital currencies at Deutsche Bank, reveals which countries and regions are setting the pace when it comes to CBDCs, ahead of his participation on a panel at this year’s Open Banking Expo Central Bank Digital Currencies Confex.
1. What are your expectations for CBDC in 2022?
I hope to see further developments in the wholesale CBDC space – further proof of concepts (PoCs), or an MVP of the project Multiple CBDC (mCBDC) Bridge.
But foremost, I hope to see the ECB [European Central Bank] look into this topic and, for example, leverage upon the results of the experiments of the Banque de France.
2. Who is setting the pace in CBDCs? Are there clear front runners?
With regards to retail CBDCs, clearly, China.
With regards to wholesale CBDCs, we see more advanced PoCs in Asia, e.g., around the project mCBDC.
3. Will CBDCs change the balance of power when it comes to global reserve currencies?
I don’t expect a strong shift into other currencies when it comes to the global reserve standard because there are many reasons why the US dollar is the global reserve currency. However, I believe that its dominance might decrease due to a stronger part of Chinese yuan in global trade, as well as Asian currencies participating in more efficient wholesale settlement systems.
4. What needs to happen for CBDCs to become part of mainstream finance?
For retail CBDCs: provide relevant features that current financial technology in payments does not deliver.
For wholesale CBDCs: adoption of these new wholesale settlement systems.
5. What is the one thing people should take away from this event?
Understand the use cases for CBDCs.
Klein will be talking on the panel session ‘Leveraging CBDC for better cross border payments’ at the virtual Confex on 10 March, alongside Jim Ford, payments consultant at Digital Pound Foundation, Anne-Catherine Bohnert, deputy head of the digital currency and innovation service at Banque de France and Payments Solved founder Nilixa Devlukia.
To register for the Confex, click here.
