The International Monetary Fund (IMF) is currently developing a platform for central bank digital currencies (CBDCs) that will facilitate cross-border transactions, announced IMF Managing Director Kristalina Georgieva. Speaking at a conference attended by African central banks in Morocco, Georgieva emphasized the need for interconnected systems to promote more efficient and equitable transactions. She also highlighted the IMF’s efforts in creating a global CBDC platform to ensure global interoperability. The IMF aims to establish a common regulatory framework for digital currencies that will encourage collaboration among central banks. Failure to reach a consensus may result in a gap that could potentially be filled by cryptocurrencies. Unlike decentralised cryptocurrencies, CBDCs are regulated and controlled by central banks.
Currently, 114 central banks are exploring the implementation of CBDCs, with approximately 10 already at an advanced stage. Georgieva stressed the importance of not limiting the use of CBDCs to domestic purposes, as their potential could be underutilized in that case. CBDCs could also drive financial inclusion and reduce the cost of remittances, which currently amount to $44 billion annually with an average transfer cost of 6.3 percent. Georgieva further emphasized the significance of backing CBDCs with assets, highlighting that cryptocurrencies represent an investment opportunity when backed by assets, but act as a speculative investment otherwise.
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