The Monetary Fund.. a global platform for digital currencies subject to central banks
The Monetary Fund.. a global platform for digital currencies subject to central banks
6-20-2023
International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Monday that the fund is working on creating a platform for central bank digital currencies to facilitate transactions between countries.
“Digital currencies subject to central banks should not be sporadic national proposals… To enjoy more efficient and fair transactions, we need systems that connect countries,” Georgieva said at a conference attended by African central banks in the Moroccan capital, Rabat.
“That is why we are working at the International Monetary Fund on a vision of a global platform for central bank digital currencies,” she added.
The IMF wants central banks to agree on a common regulatory framework for fungible digital currencies around the world.
Georgieva added that the failure to agree on a common platform could create a void that cryptocurrencies will likely fill.
It also confirmed that the poor development of digital currencies for the Central Bank may lead to judicial challenges, and risks to financial stability, data confidentiality, and financial integrity.
A CBDC is a currency controlled by the central bank, while cryptocurrencies are subject to almost no supervision by central banks.
Promoting financial inclusion
The fund manager said that 114 central banks are at some stage in exploring digital currencies, and “10 of them have already completed the task.”
“If countries develop CBDCs only for domestic use, then we are not leveraging their full potential,” she added.
Georgieva explained that the digital currencies of central banks may also help in enhancing financial inclusion and reducing the cost of transfers, and said that the cost of transferring funds amounted to about $ 44 billion annually.
For his part, Governor of Bank Al-Maghrib (Central Bank) Abdellatif Jouahri stressed the need to continue and deepen the discussion on the central bank’s digital currencies, and the challenges associated with it.
“If many regulating (regulatory) bodies have adopted a cautious attitude towards the launch of (currency) Bitcoin, central banks quickly realized that inertia is no longer an option if they want to maintain their central role as a source of currency,” Al-Jawahiry said.
This conference comes at a time when preparations are underway to hold the annual meetings of the International Monetary Fund and the World Bank, in Marrakech, Morocco, from 9 to 15 October.
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