June 14, 2024
IMF Chief Backs CBDCs for Financial Inclusivity
Latest Cryptocurrency News

IMF Chief Backs CBDCs for Financial Inclusivity

During her opening speech at the Singapore FinTech Festival, IMF Managing Director Kristalina Georgieva urged the public sector to “keep preparing to deploy” central bank digital currencies (CBDCs). Georgieva expressed optimism about global CBDC implementation. She emphasized that “we have not yet reached the land,” acknowledging existing uncertainty.

She pointed out that the adoption of CBDCs is not imminent, stating that “about 60 percent of countries are exploring them in some form today.” Georgieva sees CBDCs as potential replacements for cash, offering resilience in advanced economies and improving financial inclusion in underbanked communities. According to her, CBDCs can coexist with “private money,” serving as a “safe and low-cost alternative.”

Georgieva highlighted the importance of technological infrastructure in CBDC projects and emphasized personal data protection. She also mentioned the potential role of artificial intelligence (AI) in enhancing national digital currencies. The IMF head particularly stressed the need for cross-border payment support, stating, “To the extent CBDCs are deployed. They must be built to facilitate cross-border payments, which are at present expensive, slow, and available to few. Again, we must start his work today so we don’t have to backpedal tomorrow.”

During her address, Georgieva presented the IMF’s CBDC virtual handbook and acknowledged the role of the Bank. This is for International Settlements (BIS) in the public sector’s digital money experiments. The IMF has been actively analyzing necessary crypto regulations, proposing a crypto-risk assessment matrix on September 29. This matrix, part of the IMF’s Synthesis Paper prepared with the Financial Stability Board, was unanimously adopted by G20 finance ministers and central bank governors in October.

Image by rawpixel.com on Freepik

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