The Bank for International Settlements (BIS) is setting up shop to help officials embrace financial technology, who may need to speed up developing their own digital currency.
The BIS, which promotes cooperation among the world’s monetary officials, announced on Sunday it was starting an innovation hub for financial technology. And in an interview with the Financial Times, BIS General Manager Agustin Carstens said that “it might be that it is sooner than we think that there is a market and we have to create our own digital currencies.”
The news comes after Facebook Inc. earlier this month unveiled plans to create a cryptocurrency it expects will one day trade much like the dollar.
As head of the Basel, Switzerland-based BIS, Carstens has spoken frequently about the impact of digitisation, and has argued there was a strong case for authorities to rein in cryptocurrencies like Bitcoin, which he said wasn’t functional as a means of payment.
Yet central banks, notably Sweden’s, are looking into digital currencies of their own, and the BIS’s new hub is designed to improve understanding of nascent technologies and develop ways to improve the financial system.
“There needs to be demand for central bank currencies and it is not clear that the demand is there yet,” Carstens told the FT.
“Perhaps people can do what they want by using electronic wallets provided by banks or fintech companies. It depends on the development of private stable coins.”
The BIS’s hub will be set up in Switzerland, Hong Kong and Singapore, in collaboration with their respective monetary policy officials, according to a statement.