CBDCs can ‘replace cash,’ IMF says
Central banks thinking about CBDCs may need to act more like “entrepreneurs,” IMF’s Georgieva said
International Monetary Fund’s managing director Kristalina Georgieva focused on the benefits of central bank digital currencies (CBDCs) in a speech Wednesday.
Speaking at the Singapore Fintech Festival, Georgieva asked policymakers to continue introducing and possibly embracing CBDCs. Her speech echoed a similar one from Christine Lagarde — her predecessor — made five years ago.
“The public sector should keep preparing to deploy CBDCs and related payment platforms in the future,” Georgieva said.
She warned that the world continues to move forward at breakneck speeds with new technologies, citing ChatGPT’s two months to reach 100 million users — something that generally takes applications roughly three years.
Countries, Georgieva added, “should remain open to potentially deploy CBDCs tomorrow.”
Various countries — including the US — are currently exploring or looking into a possible CBDC . However, many have said that they’re a ways off even if central banks choose to push forward.
Read more: Fed continues to explore ‘CBDC payments backbone:’ Barr
In August, Canada’s central bank admitted that “significant” barriers remain before it can implement a CBDC.
A Bank of International Settlements survey in July found that there’s high demand for the exploration of CBDCs , with 94% of banks surveyed admitting interest.
“CBDCs can replace cash which is costly to distribute in island economies. They can offer resilience in more advanced economies. And they can improve financial inclusion where few hold bank accounts,” Georgieva said. She noted that 60% of countries are exploring a CBDC.
She pushed central banks interested in CBDCs to “think a little more like entrepreneurs. Communication strategies, and incentives for distribution, integration, and adoption, are as important as design considerations.”
One of the most important factors when exploring a CBDC is the ability for CBDCs to facilitate cross-border payments. The general manager of the Bank of International Settlements, Agustin Carstens, echoed a similar sentiment in late September.
“But we may be at a point where the public sector needs to offer a little more guidance. Not to crowd out, not to disrupt. But to act as a catalyst, to ensure safety and efficiency — and to counter fragmentation,” she said.
The IMF also announced a CBDC handbook essentially explaining different steps to start exploring a CBDC.
Don’t miss the next big story – join our free daily newsletter .
- CBDC
- International Monetary Fund
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The address sbfonchain.sol spent $4.73 million to buy WIF two hours ago
IBIT had a net inflow of US$268 million yesterday
MicroStrategy purchased 134,480 Bitcoins worth $12 billion in November