EMTECH is rolling out its new Modern Central Bank Sandbox, which will help to streamline regulatory reviews and test central bank digital currencies (CBDCs), a press release says. The platform will also help central banks that want to collaborate with innovators on new technology.
The Modern Central Bank Sandbox, according to the release, will help smooth out challenges in banking with things like “exclusion, KYC, SME lending, cross-border payments, AML/fraud,” and will also enable them to innovate safely with effective oversight and quicker time to market.
EMTECH aims to provide central banks with an infrastructure for digital cash. For example, EMTECH is currently working with the Central Bank of the Bahamas on its Digital Sand Dollar Currency.
The release states that central banks currently have around $9 trillion in paper money. Digitizing that money can help boost liquidity for both small businesses and individuals, while also ensuring that central bank money remains an anchor for “a robust and competitive financial sector.”
EMTECH’s technology aims to give banks an “action-ready toolset for new and inclusive monetary policy, and the guardrails for efficient transfer of an estimated $90 trillion in cash payments,” per the release.
The implementation of CBDCs could mark shift in financial relationships, the release notes, quoting the latest Deutsche Bank Wealth Management CIO report from September. The CBDCs could help boost transaction speeds, security and transparency, and make for a more effective monetary policy.
In Europe, banking experts have sometimes opined that there should be very strict control over CBDCs, with only official state powers using them. And Bundesbank President Jens Weidmann said he thinks cash will still have a place in the world due to how many people still depend on it.
However, European Central Bank (ECB) executive board member Yves Mersch said earlier this year that the retail CBDC would be a “game-changer” for finance and that limiting it to governments would basically just be business as usual.