Yesterday the Bank for International Settlements (BIS) announced a blueprint for the future monetary and financial system, that will include programmable central bank money. Read the press release on the special chapter of BIS’ Annual Economic Report 2023.

From the introduction in the special chapter:

A unified ledger transforms the way that intermediaries interact to serve end users. Through programmability and the platform’s ability to bundle transactions (“composability”), a unified ledger allows sequences of financial transactions to be automated and seamlessly integrated. This reduces the need for manual interventions and reconciliations that arise from the traditional separation of messaging, clearing and settlement, thereby eliminating delays and uncertainty. The ledger also supports simultaneous and instantaneous settlement, reducing settlement times and credit risks. Settlement in central bank money ensures the singleness of money and payment finality. (…)

In embracing evolution and change, central banks and the private sector should follow key guiding principles to ensure that the monetary system harnesses innovation for the public interest. First, the tried and tested division of roles between the public and private sector in the two-tiered system remains the cornerstone. The second principle is upholding a competitive level playing field that promotes innovation and financial inclusion. And third, the future monetary system needs to meet the highest standards of data security and privacy, while ensuring system integrity by guarding against illicit activity such as money laundering, financing of terrorism and fraud.

In an earlier post on this blog I wondered what was coming.