How ITU is building trust in digital currency
*The text below is an adapted version of my opening remarks yesterday at the first meeting of the new Digital Currency Global Initiative, a partnership of ITU and Stanford University.
My friend Lawrence Rufrano at Stanford University often shares his view that information and communication technologies (ICTs) can provide the unifying force for banking systems worldwide.
We see this unifying force at play in many fields of ITU work.
COVID-19 has offered a powerful reminder of ICTs’ importance to our societies and economies. We are reminded that ICTs are the unifying force at the centre of our interconnected world.
ICTs are now a key part of every discussion about our future. The neutral ITU platform must help us to unify these discussions.
Only by working together can we achieve coherence in the application of ICTs, coherence that will be fundamental to ICTs’ success in contributing to a better world.
Standardization is a key avenue for new partners to build mutual trust and understanding.
We see new partners moving forward together in ITU standardization work for smart cities; energy; transport; healthcare; agriculture; and, of course, financial services.
Industries are converging, and ICTs are the platform enabling this convergence.
We see an associated convergence in the responsibilities of different regulatory authorities.
It is in this context that the ITU standards platform – for many years central to building trust within the ICT sector – is now helping the ICT sector to build trust with its many new partners.
The importance of inclusive dialogue
ITU is the UN specialized agency for ICTs. Our global membership includes 193 Member States and over 900 companies, universities and research institutes.
We have spent many years bringing ICT decision-makers together with decision-makers in other industries.
This inclusive dialogue has created the conditions necessary to deliver influential ITU standards for sectors such as healthcare, automotive and fintech.
The new Digital Currency Global Initiative will make a key contribution to this dialogue.
The ICT industry continues to gain a range of new stakeholders and this of course translates into new stakeholders in ITU standardization.
Here we see the value of open platforms such as ITU focus groups and this new Global Initiative. These platforms support the development of new partnerships in emerging fields of ICT innovation. They are important in clarifying the contributions expected of various stakeholders, including the contribution expected of ITU standardization.
This new Global Initiative builds on a substantial body of prior work on the ITU platform.
The initiative follows an ITU Focus Group on Digital Financial Services, the Financial Inclusion Global Initiative, and an ITU Focus Group on Digital Currency including Digital Fiat Currency.
ITU standards for digital finance address ‘Security, Infrastructure and Trust’. They provide for high quality of service and user experience, and they safeguard security to build trust in digital finance.
The demand for these ITU standards was identified and refined by inclusive dialogue incorporating all possible perspectives.
This is exactly the spirit of the Digital Currency Global Initiative.
Towards standards for digital currency
The initiative will continue the research and dialogue set in motion by the ITU Focus Group on digital fiat currency active from 2017 to 2019.
The group detailed the requirements of Central Bank Digital Currency (CBDC) as they relate to regulation, technical and business dynamics, and security.
It delivered a set of recommended design principles for CBDC as well as a reference architecture for the different implementations of CBDC for retail, wholesale and cross-border payments.
The formation of the Focus Group came at exactly the right time.
The Bank for International Settlements reported that all of its member Central Banks had launched investigations into CBDC over the two years the Focus Group was active.
The Focus Group’s work was driven in collaboration by Central Banks, ICT regulators, commercial banks, financial service providers, telecom companies, security professionals, fintech innovators, and technical and financial standards bodies.
As interest in the topic grew, the Focus Group offered Central Banks a venue to find expertise to assist their digital currency investigations.
This work continues in the new Global Initiative.
The initiative will engage all stakeholders to study pilot implementations and use cases of digital currency. It will developing specifications to inform technical standards and construct a set of metrics by which to evaluate innovative use cases of digital currency.
This work aims to establish a foundation for the independent validation of CBDCs and other models of digital currency.
This validation will identify best practices to assist the evolution and iterative improvement of ITU standards for digital currency.
We welcome your participation
ITU is a unique platform.
We are unique in the ICT standards world as the only body to include governments. And we are unique in the UN system as the only body to include the private sector.
We are in a unique position to bring the benefits of ICTs to everyone, everywhere.
Working together, thinking in a multidisciplinary way and playing to our complementary strengths, we can ensure that innovation in digital currency leads to meaningful improvements in the quality of life enjoyed by billions of people worldwide.
I am looking forward to the next chapter of our collaboration in the Digital Currency Global Initiative.
By Chaesub Lee, Director of the ITU Telecommunication Standardization Bureau
Original Souce : ITU News