19-6-2023 (RABAT) The International Monetary Fund (IMF) is in the process of developing a platform for central bank digital currencies (CBDCs) to facilitate cross-border transactions, according to IMF Managing Director Kristalina Georgieva.
During a conference attended by African central banks in Rabat, Morocco, Georgieva emphasized the importance of avoiding fragmented national CBDC propositions. She stressed the need for systems that connect countries to enable more efficient and fairer transactions, highlighting the significance of interoperability.
Georgieva stated, “For this reason at the IMF, we are working on the concept of a global CBDC platform.”
The IMF aims to encourage central banks to reach a consensus on a common regulatory framework for digital currencies that allows for global interoperability. Georgieva warned that failure to establish a common platform would create a void that could potentially be filled by cryptocurrencies.
It was revealed that 114 central banks are currently exploring CBDCs to varying degrees, with approximately 10 of them nearing completion.
Georgieva underscored that if countries solely develop CBDCs for domestic use, the full potential of these digital currencies would be underutilized.
Furthermore, CBDCs have the potential to promote financial inclusion and reduce the cost of remittances. Georgieva pointed out that the average cost of money transfers stands at 6.3 percent, amounting to $44 billion annually.
Georgieva also emphasized the importance of CBDCs being backed by assets. She noted that while cryptocurrencies can present investment opportunities when backed by assets, they become speculative investments when lacking such backing.
The IMF’s efforts to create a global platform for CBDCs reflect the organization’s commitment to fostering financial stability and enhancing the efficiency of international transactions.
