Izabella Kaminska at The Blind Spot, June 8/9:
World needs a CBDC treaty, Cecchetti tells cbankers
LONDON — Governments should consider an international moratorium on the development of central bank digital currencies (CBDCs) due to the financial stability risk they could pose for small jurisdictions, the former director of research at the Federal Reserve Bank of New York, Stephen Cecchetti, told central bankers in Finland on Thursday.
“I believe there should be something equivalent to… a CBDC treaty — like the Nuclear Test Ban treaty — across the world where everyone agrees not to issue CBDCs,” said the American economist, who is now Rosen Chair in International Finance at the Brandeis International Business School. “Because as soon as a large jurisdiction does, there will be a rush to do this and as soon as that happens, you will see the financial systems and the monetary sovereignty of small, unstable countries just get demolished.”
The comments came in the broader context of a speech that focused on how to make banks safer in the aftermath of the bout of financial instability that gripped markets in March....
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