- IMF Managing Director Kristalina Georgieva claims that digital currencies issued by central banks can provide resilience in more developed economies and serve as a cash substitute in island economies.
- Accordingly, the public sector should keep getting ready for the implementation of CBDC, she said.
The International Monetary Fund’s (IMF) Managing Director, Kristalina Georgieva, defended bank currencies (CBDCs) during the Singapore FinTech Festival. She insisted that the industry be ready to adopt CBDCs because she thought they might significantly increase inclusiveness and maybe displace cash.
Georgieva admitted that there are still questions about how widely CBDCs would be used. She did, however, note that 60% of nations investigate alternative currencies, suggesting that interest in this financial innovation is rising.
Georgieva emphasized in her address two benefits of CBDCs: increasing financial access in underbanked areas and bolstering resilience in wealthy countries. According to her, CBDCs are reasonably priced substitutes for cash that work with the current financial system.
Georgieva stressed the significance of creating an infrastructure to support CBDCs as a crucial component. This entails giving data security a priority and possibly using intelligence to improve these digital currencies. Georgieva underlined in particular how important it is for CBDCs to enable more international payments.
The IMF is working with the Bank for International Settlements on a number of digital currency initiatives and has just released a handbook on CBDCs. The IMF’s proposed grid for evaluating the risks associated with cryptocurrencies demonstrates how involved they are in the regulation of cryptocurrencies.
This pledge was reinforced when finance ministers and central bank governors at the G20 endorsed the IMF’s Synthesis Paper, which was created in conjunction with the Financial Stability Board.
Georgieva’s remarks highlight the IMF’s commitment to leading the industry into the modern era. We are seeing a shift that will redefine money and transactions as we know them, thanks to the IMF’s leadership and the growing interest in CBDCs.