Introducing a central bank digital currency (CBDC) will have significant implications for the operations and risks faced by the issuing central bank. These implications are dependent on the specific design chosen and various internal and external factors. This report focuses on analyzing the operating, technology, third-party, and business continuity risks that the issuing central bank may encounter. It serves as a valuable complement to other research on CBDCs, which often concentrates on their impact on financial stability, monetary policy, and the broader economy.
The report proposes an integrated risk-management framework that can be applied throughout the entire life cycle of a CBDC, from research and design to implementation and operation. It discusses the consequences of different design choices that central banks must make and suggests tools and processes to identify and mitigate the risks associated with a CBDC. In order for CBDCs to be a reliable payment method, central banks must also address risks such as interruptions, disruptions, and ensuring integrity and confidentiality. A key risk is the potential gaps in central banks’ internal capabilities and skills. While some CBDC-related activities can be outsourced, this requires the capacity to select and supervise vendors effectively.
This report is the result of collaborative work conducted by BIS member central banks in the Americas, under the Consultative Group on Risk Management (CGRM). The CGRM brings together representatives from the central banks of Brazil, Canada, Chile, Colombia, Mexico, Peru, and the United States. The task force responsible for this report was led by Diego Ballivián from the Central Bank of Chile, with subgroups led by Antonieta Campa from the Bank of Mexico, MarÃa Jesús Orellana from the Central Bank of Chile, and David Whyte from the BIS. The BIS Americas Office acted as the secretariat.