The International Monetary Fund, in one of its reports, has highlighted the benefits of a central bank digital currency in the Middle East, laying focus on its future potential.
The International Monetary Fund (IMF) has released a detailed report on the usage of a central bank digital currency (CBDC). The report directly reflects on the benefits of CBDC adoption in the Middle East. According to the IMF, nineteen central banks in the Middle East and Central Asia region are conducting research on CBDC adoption. While noting it as a positive factor, the IMF also underlined other benefits of a CBDC.
CBDCs could significantly boost digital payment systems and financial systems of countries, noted the IMF. Further, it said CBDC adoption could also help lower costs of digital payment systems. This was on top of facilitating smooth cross border payments, it added.
The report described how various countries in the above region were at different stages of CBDC exploration. Kazakhstan was at the most advanced stage, followed by the UAE, Saudi Arabia, Georgia, and Bahrain. Regarding cross-border payments, the IMF shared the example of the Arab Monetary Fund’s Buna system.
Meanwhile, the international financial institution stated, “CBDCs can advance financial inclusion by fostering competition in the payments market and allowing for transactions to be settled more directly and with less intermediation, in turn lowering the cost of financial services and making them more accessible.”
The IMF has regularly stressed the importance of CBDCs. Earlier this year, it released another report on using CBDCs and stablecoins. The IMF’s head had also endorsed CBDC payments a while ago in 2023.
Moreover, the institution has also worked with central banks worldwide on their respective CBDC projects. The IMF has lent its expertise to these collaborative initiatives.
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