The International Monetary Fund (IMF) is working on a platform for central bank digital currencies (CBDCs) to enable cross-country transactions, Kristalina Georgieva, managing director of the IMF, said Monday June 19. It should be noted that the Central Reserve Bank of Peru (BCRP) is also evaluating its possible implementation.
“CBDCs should not be fragmented national propositions… To have more efficient and fair transactions we need systems that connect countries: we need interoperability,” Georgieva told a conference attended by African central banks in Rabat, Morocco.
“For this reason, we at the IMF are working on the concept of a global CBDC platform,” he added.
The IMF wants central banks to agree on a common regulatory framework for digital currencies that allows for global interoperability. Failure to agree on a common platform would create a void that cryptocurrencies were likely to fill, he said. A CBDC is a digital currency controlled by the central bank, while cryptocurrencies are almost always decentralized.
There are already 114 central banks that are in some phase of exploring CBDCs, “with about 10 having already crossed the finish line,” he said. “If countries develop CBDCs only for domestic deployment, we are underutilizing their capacity,” he added.
CBDCs could also help promote financial inclusion and make remittances cheaper, he added. He pointed out that the average cost of money transfers stands at 6.3%, which is US$44 billion annually.
Georgieva stressed that CBDCs must be asset-backed, adding that cryptocurrencies are an investment opportunity when they are, but when they are not they are a “speculative investment.”
With information from Reuters.
Source: Larepublica
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