Banking Management & legal News

G7 stablecoins chair, ECB member joins BIS Innovation Hub for CBDCs

Benoît Coeuré

Today the Bank of International Settlements (BIS) announced that it has appointed Benoît Coeuré as head of the BIS Innovation Hub. The Hub fosters cross-border research of financial technologies for the central bank governing body. These include stablecoins, central bank digital currencies (CBDC), and payment systems.

Benoît Coeuré will leave his current role as chair of the BIS Committee on Payments and Market Infrastructures for financial stability in January. Coeuré has additionally been an executive board member of the European Central Bank (ECB) for eight years and is chair of the G7 working group on global stablecoins.

In September, he made a detailed speech at the ECB on how stablecoins could challenge the supremacy of the US dollar. The address came just two days after he reportedly chaired a meeting between Facebook’s Libra representatives and 26 central banks on trust and stability.

The more recent G7 working group report made the same conclusion; stablecoins are a “systemic risk”, it found. But Coeuré is far from against digital currency innovations. He believes that central banks improving global payment systems can mitigate the risk privately owned currencies present.

In the September speech, he said: “the ECB and the Bank of Japan have already joined forces to examine the possible use of distributed ledger technology in financial market infrastructures. The next natural step would be for global central banks to join forces and jointly investigate the feasibility of CBDCs based on common technical standards.”

This is almost precisely what the BIS Innovation Hub intends to do. There are three Hub Centres in Hong Kong, Switzerland, and (to be officially launched on Wednesday) Singapore. It was revealed last month that the Swiss branch would focus on CBDCs with the country’s central bank and stock exchange owner SIX. So the appointment of Benoît Coeuré seems like the perfect fit.

“I am delighted to have Benoît on board to advance the important mission of the Hub, which is to harness innovation to improve the functioning of the international financial system,” stated Agustín Carstens, BIS General Manager.

He added: “Technology-driven innovation is driving change in many fields and can bring great benefits for anyone who makes and receives payments. The Hub reflects central banks’ commitment to share resources and lay the foundations for a bright future.”

Coeuré himself was equally optimistic: “I look forward to bringing my expertise to the global central banking community at this time of rapid technological change. We must make the best use of innovation to support financial stability and promote financial inclusion.”