Strategic technology: Regulation and innovation of CBDCs

Frederic de Vaulx

The fields of regulatory and supervisory technologies (regtech and suptech) have emerged with the increasingly rapid development and complexification of the existing digital monetary ecosystem and financial market infrastructure. This requires technological innovation to support the infrastructure’s complexity and to manage the risks that may arise. In addition, achieving a sustainable alignment with domestic and international financial stability goals is driving both innovation and new business models while supporting the unique mandates of both traditional and new stakeholders (eg, central banks, private banks, practitioners and consumers).

Many domestic and cross-border regulations, such as know your customer (KYC), anti-money laundering (AML), the Bank Secrecy Act (BSA), the Dodd–Frank Act or General Data Protection Regulation (GDPR), have been introduced to protect the consumer and the economic system. They have an impact on what regulated financial institutions and supervisory institutions can do, as well as the authority and responsibilities these entities have in their respective fields. Innovations and technologies continue to evolve to address the complexity and broad