IMF is Developing a Global Digital Currency Platform

According to IMF Managing Director Kristalina Georgieva, the IMF is developing a framework for central bank digital currencies (CDBCs) to promote trade between nations.

“CBDCs should not be a collection of disparate national proposals… Interoperability is necessary for more effective and equitable transactions, according to Georgieva, who spoke at a conference of African central banks in Rabat, Morocco.

“For this reason, at the IMF, we are working on the concept of a global CBDC platform,” she stated.

The IMF wants central banks to settle on a standard regulatory scheme for virtual currencies that will enable interoperability on a worldwide scale. She said the absence of a unified platform would leave a void that cryptocurrencies will probably fill.

While cryptocurrencies are almost usually decentralized, a CBDC is a digital currency that is managed by the central bank.

114 central banks have already started exploring the CBDC, with “about 10 already crossing the finish line,” according to her.

“We are underutilizing their capacity if countries develop CDBCs only for domestic deployment,” she continued.

She added that the average cost of remittances is 6.3%, or $44 billion annually, and that CBDCs might assist advance financial inclusion and lower remittance costs.

Georgieva stressed that CBDCs should be backed by assets and added that cryptocurrencies are an investment opportunity when backed by assets, but when they are not they are a “speculative investment.