BIS Backs Two-Tier CBDCs and Challenges Crypto’s Claim to Money

The Bank for International Settlements on June 23, 2021 released a special chapter of its forthcoming 2021 Annual Economic Report that placed central bank digital currencies, rather than privately issued cryptocurrencies, at the center of its preferred future for digital money. The chapter backed a two-tier model: a central bank would provide the core monetary liability and infrastructure, while commercial banks and payment providers would handle most customer-facing services.

That was a consequential institutional marker. The BIS is a forum and service provider for central banks, and its analysis helped define the questions monetary authorities were asking as bitcoin, stablecoins and large technology companies competed for attention in payments. It did not create a digital currency, bind any member central bank or settle the policy debate. It did, however, turn a broad interest in CBDCs into a more concrete design argument.

What the BIS proposed

The chapter defined a CBDC as digital money denominated in a national unit of account and issued as a direct liability of a central bank. It distinguished wholesale CBDCs, intended for financial intermediaries, from retail CBDCs available to households and businesses.

For general use, the BIS favored an account-based design connected to digital identification. Its stated aim was to combine privacy protections with the ability to guard against money laundering and other illicit activity. The institution also argued that open payment platforms and clear data-governance rules could preserve competition, rather than allow transaction data and market power to concentrate inside private “walled gardens.”

The recommended architecture was deliberately not a model in which the central bank would perform every retail function. Under the two-tier approach, the central bank would anchor settlement, liquidity and integrity; regulated private providers would build services and interact with customers. Cross-border gains, the chapter cautioned, would require coordination among central banks, particularly where digital identity systems and currency substitution crossed jurisdictions.

A direct challenge to private crypto

The report drew a sharp line between CBDCs and cryptocurrencies. It characterized cryptocurrencies as speculative assets rather than money and argued that bitcoin had few public-interest advantages once its energy use was considered. It treated stablecoins differently but still skeptically: their credibility depended on the governance and assets behind redemption promises, and fragmented private monies could weaken money’s coordinating role.

Those statements were the BIS’s institutional assessment, not neutral measurements of every network or token. The chapter did not test a live retail CBDC against bitcoin, publish adoption results or establish that one technology would displace another. Its criticism nonetheless mattered because it framed the policy contest around trust, final settlement, privacy, competition and sovereign monetary control—not simply around whether distributed ledgers could process transactions.

What changed on June 23, 2021

The immediate change was in the official policy record. The BIS moved beyond describing CBDCs as experiments and presented them as a practical opportunity for the monetary system. Its press release said the concept’s time had come, while the underlying chapter supplied the architecture and public-interest case.

The boundary is important. No consumer received a new central-bank wallet on June 23, 2021. No jurisdiction was obliged to adopt the BIS design, and the chapter acknowledged that issuance choices would depend on local payment systems, laws, development levels and user preferences. The full Annual Economic Report was scheduled for release on June 29, so the dated event here is the June 23 publication of the CBDC chapter and its accompanying announcement.

For crypto markets, the significance was strategic rather than a documented one-day price effect. The record supports a widening institutional divide: central banks were willing to borrow selected digital-ledger concepts, including permissioned systems, while rejecting the idea that permissionless cryptocurrencies should become the monetary foundation. No causal claim about bitcoin’s price, trading volume or market capitalization is made because the BIS materials do not establish one.

The unresolved questions

As of June 23, 2021, privacy protections, access rules, the role of intermediaries, cybersecurity, offline use and cross-border interoperability remained design problems rather than settled features. The strongest conclusion the evidence supports is therefore narrow but important: the BIS endorsed active CBDC development and a specific public-private architecture, while explicitly contesting the monetary case for bitcoin and privately governed stablecoins.