The general manager of the BIS, Agustin Carstens, recently gave a speech on innovation and the future of money. The general manager suggested the launch of a new sponsored smart contract platform while taking note of CBDCs.

Carstens talks on how central banks need to adapt to shifting consumer demands and technology advancements. He claims that doing so is essential to ensuring that banks, similar to the idea behind CBDC initiatives, are made accessible in a way that is appropriate for the digital economy.

He contends that in order to get the most from advances in cash and payments, we must have a broad picture perspective of the future monetary system and the central banks' role in fostering innovation that satisfies changing requirements. He claimed that if we follow this strategy, we would be able to get the most from advancements in payments and money.

Mr. Carstens used the development of smartphones as an example of innovation to emphasize the necessity for a strong and safe infrastructure that frees the private sector's creativity and ingenuity for innovation to thrive.

The many components of a platform must also be able to work together successfully, he added. He cautioned against monopolizing technological platforms that utilize network effects to stifle competition and ensnare customers behind "walled gardens."

The manager made the argument that central banks are in a unique position to lay the foundation for the infrastructure of the next generation, such as a unified programmable ledger in the context of a public-private partnership, in their capacity as the guardians of the public's faith in their monetary system.

According to Mr. Carstens, increased interoperability and automated transfers may eventually be advantageous to clients by enabling solutions that are more readily available, less expensive, and better suited to their needs, increasing financial inclusion.

He noted that all programmability and composability benefits may be accomplished on authorized systems with different levels of centralization. The central bank is heavily responsible for providing the last settlement asset in the economy.

Thus, the central bank is essential to the management of a unified ledger.

A unified ledger is a digital architecture that connects different registers of natural and financial claims with the monetary system. A unified ledger might be used to accomplish this. Moreover, it would enable composability, which means that several smart contracts might be bundled into a single agreement.

These capabilities allow for the automatic integration and automation of all programmable money transactions.

As a result, there is less demand for human interaction, which might delay transactions. In addition, it is no longer necessary to use middlemen and it is now feasible to make payments and settlements at the same time.

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