TLDR
A BIS committee published a report on Oct. 29 outlining four central bank roles in a changing payments system.
The four roles are issuer, operator, overseer and catalyst.
The report calls central bank money the “anchor of trust” for settling payments.
Stablecoins and tokenized deposits may improve efficiency but could also spread new risks.
The report calls for strong international cooperation, since policies may differ by country.
The Committee on Payments and Market Infrastructures (CPMI) published a new report on Oct. 29. It looks at how central banks fit into a payments system that now includes stablecoins and tokenized deposits.
The CPMI is a standard-setting body hosted by the Bank for International Settlements (BIS). It works to support safe and efficient payment, clearing and settlement systems around the world.
The report is titled “The roles of central banks and central bank money in the evolving payment system.” It sets out four roles for central banks: issuer, operator, overseer and catalyst.
Central Bank Money Remains the Anchor
The report calls central bank money the “anchor of trust” in the payment system. It says this money is the safest and most liquid asset for settling payments in systemically important systems.
It also supports convertibility at par. This means different types of money can be exchanged at the same face value.
Private payment services still have a role. The CPMI says private firms drive innovation and competition and offer services that meet different user needs.
The report reviewed fast payment systems, non-bank payment providers, tokenized deposits, stablecoins and programmable platforms. It found that more variety could improve efficiency, competition and innovation.
However, it also pointed to risks. New arrangements may create new links between players and change how credit, liquidity, operational and cyber risks spread across the system.
“Payments are at the frontier of finance,” said Fabio Panetta, Governor of the Banca d’Italia and Chair of the CPMI. “Central banks cannot watch this frontier from a distance; they must understand change as it happens and, where necessary, help shape its course.”
Four Roles for Central Banks
As an issuer, a central bank decides which entities can hold central bank accounts. It also decides which services they can use and on what terms.
As an operator, a central bank may upgrade existing systems or build new platforms. The report says it must balance resilience, innovation and implementation risks.
As an overseer, a central bank checks whether new arrangements, including stablecoins, act like financial market infrastructures. It also reviews their systemic importance, governance and operational resilience.
As a catalyst, a central bank brings groups together to solve shared problems. It also supports market solutions and encourages common industry standards.
The report builds on a 2003 paper from the CPMI’s predecessor, the Committee on Payment and Settlement Systems. It also follows an October 2024 BIS and CPMI report to the G20 on tokenization.
The report sets out policy considerations rather than binding global rules. It also notes that central bank policies may differ from country to country.
The CPMI calls for central banks to view their policy tools together, since action in one area can affect another. It also stresses the need for strong and ongoing international cooperation as payments become more digital and connected.
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