The International Monetary Fund (IMF) is “working hard” on a “global CBDC (Central Bank Digital Currency) platform,” the IMF managing director announced Monday.
“If we are to be successful, CBDCs could not be fragmented national propositions,” Kristalina Georgieva said during a policy roundtable discussion with Bank Al-Maghrib in Rabat, Morocco on CBDCs.
“To have transactions more efficient and fairer, we need systems that connect countries. In other words, we need interoperability,” she said in reference to a global CBDC.
“For this reason, at the IMF we are working hard on the concept of a global CBDC platform to trade and to manage risks,” she continued.
Georgieva touted CBDCs as “giving more people access to financial services, and at a lower cost, enhancing payment system “efficiency” and “resilience,” and making cross-border payments “cheaper and quicker” while reducing the number of needed intermediaries.
She cautioned, however, that “easy access to foreign CBDCs could lead to risks of currency substitution and capital flow volatility,” suggesting that a global CBDC would enhance “international economic stability,” a goal the IMF has tasked itself with promoting, she noted in a press release statement on the roundtable discussion.
Asked whether she thought “economic integration” could happen without CBDCs, Georgieva admitted that progress on the matter could be made either way but said, without delving into specifics, that if CBDCs are only used domestically, “we are under-utilizing their capacity.”
Georgieva was also asked what kind of timeline for a global CBDC platform could be expected but did not address the question.
She pointed out that 114 central banks are at one stage or another of exploring CBDCs and that about 10 have already “crossed the finish line,” adding, with a smile, that the largest CBDC pilot program is taking place in China, with 118 million participants.
Georgieva listed three main “policy” challenges in bringing about cross-border CBDC payments: “Common settlement asset,” “common legal and regulatory frameworks,” and “shared infrastructure,” suggesting global governance can aid the rollout of a global CBDC.
In April, the IMF announced that it was creating a CBDC handbook to help central banks and governments across the world with their CBDC rollouts, with former People’s Bank of China deputy governor and current IMF deputy managing director Bo Li saying the handbook would “hopefully help countries make as well-informed decisions as possible” regarding their CBDCs.
He boldly proposed that CBDC transactional data could be used like it is in China to create social credit scores.
No comments:
Post a Comment