The head of the International Monetary Fund spoke recently on the benefits of CBDC payments and how its adoption could soon replace cash for payments.
The Singapore FinTech Festival saw a dedicated nudge for CBDC payments from the MD of the IMF, Kristalina Georgieva. She spoke about the huge potential for central bank digital currencies (CBDCs) while pointing out some issues. Georgieva mentioned how CBDC adoption had yet to reach the desirable levels. On the other hand, multiple countries were exploring the use cases of digital currencies.
“To the extent CBDCs are deployed, they must be built to facilitate cross-border payments, which are at present expensive, slow, and available to few. Again, we must start this work today so we don’t have to backpedal tomorrow,” said the Managing Director.
She claimed CBDCs could also co-exist with other forms of money. Meanwhile, Georgieva said she believed it could also replace cash and improve financial inclusion. She emphasized improving the CBDC projects’ technological infrastructure, the likely role of AI, and protecting personal data.
The IMF MD then presented their handbook on central bank digital currencies. The handbook presented a detailed framework to explore CBDCs. Further, it has detailed sections on CBDC product development, capital flow management, financial inclusion, and monetary policy transmission.
The plans for the CBDC handbook were formulated earlier this year. The International Monetary Fund had written a policy paper in response to central bank requests. The recent handbook could be a positive step in CBDC adoption in the near future.
It is not the IMF’s first time helping central banks worldwide develop CBDCs, though. In May 2023, the IMF prepared a report on Nigeria’s CBDC, the eNaira. Further, it has been a strong guiding force, along with the Bank for International Settlements, for central banks worldwide.
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