A single global retail central bank digital currency (CBDC) and a single global 24/7 payment system could be an “optimum solution” as the basis for a new payment model “enhancing market discipline and fairness to all stakeholders”, according to a new paper.
In ‘Principles for a global central bank digital currency and a single global payment system’, economists Mihai Voicu and Irina Mihai propose “a single retail central bank digital currency (CBDC) to be used around the globe as a legal tender, issued based on arrangement among all central banks/governments”.
The paper also presents a case for “a single, efficient and resilient global 24/7 running payment system” that “should allow consumers and businesses to initiate CBDC payment orders (domestic and cross-border) directly and/or through a third party, to any other CBDC account and/or token-based CBDC”.
“The global payment system should be equipped with an instant CBDC settlement facility in central bank money and it should replace all current payment/settlement arrangements,” the authors add.
After examining a range of financial, economic and social reasons and motives for introducing a global CBDC, the paper lays out 24 core principles for its issuance, design, circulation, security and governance, as well as for the implementation of a global instant payments system using the currency.
In addition, it analyses the main implications of a global CBDC-based payments model for central banks, governments, financial institutions and the public.