The IMF is Designing a Global CBDC Platform - CryptoCurrencyWire

The IMF is Designing a Global CBDC Platform – CryptoCurrencyWire

Time Stamp: June 22, 2023 12:00 PM
The IMF is Designing a Global CBDC Platform - CryptoCurrencyWire PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Kristalina Georgieva, managing director of the International Monetary Fund (IMF), announced that the organization is engaged in the development of a platform to facilitate transactions between nations using central bank digital currencies, or CBDCs.

Georgieva underscored the necessity of connecting nations through interoperable systems, stating that CBDCs shouldn’t be restricted to individual countries but should aim for global efficiency and fairness. To address this, the IMF was actively seeking to make the reality of a worldwide CBDC platform.

Georgieva cautioned that any failure to reach a consensus on this matter could leave a void which could potentially be taken advantage of by cryptocurrencies. She argued that harnessing the full potential of CBDCs requires their deployment beyond national borders, as solely domestic utilization would underutilize their capabilities. She also emphasized the importance of backing CBDCs with tangible assets, noting that while cryptocurrencies present investment opportunities if backed by recognized assets, they become speculative investments when not.

A CBDC is a digital representation of government-issued currencies, differing from cryptocurrencies in that their value is tied to the fiat currency of their respective countries. CBDCs are expected to provide a middle ground within the volatile cryptocurrency market. They offer a more stable means of exchanging digital assets, reducing the associated risks and providing a reliable option for transactions.

Georgieva’s remarks align with a recent report by Moody’s Investors Service, which stated that CBDCs can reduce costs for remittances and mitigate settlement and counterparty risks in cross-border transactions for banks.

Numerous governments and central banks worldwide are taking steps to develop frameworks for integrating CBDCs into their economies. According to data from the Atlantic Council, as of December 2022, 114 countries were at various stages of this endeavor. Of these, approximately 10%, or 11 countries, have already implemented CBDCs. Around 16% are in the initial phase, while 27% are in the research stage and 30% are in the development stage.

Furthermore, the organization identified Brazil, Australia, Canada, India, China, Japan, Kazakhstan, Jordan, Laos, the Philippines, Montenegro, Russia, Turkey, Saudi Arabia, Ukraine, the United Kingdom, the United States and the United Arab Emirates as the countries making the most significant strides in CBDC development in 2023.

Georgieva confirmed that the IMF’s current stance on CBDCs builds upon discussions initiated in September in Jeddah. She also mentioned that the IMF will release two upcoming papers on CBDCs, providing new insights and analysis derived from Sub-Saharan Africa, Central Asia and the Middle East.

This undertaking by the IMF sends positive signals to industry actors such as Bit Digital Inc. (NASDAQ: BTBT) since it shows that blockchain technology has come of age and is being adopted by major international entities involved in the finance space.

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