IMF Head: CBDCs Can Replace Cash

Kristalina Georgieva, managing director of the International Monetary Fund (IMF), urged the public sector to "keep preparing to deploy" central bank digital currencies (CBDCs) and related payment platforms in the future throughout her opening speech at the Singapore FinTech Festival.

Georgieva said, "We have not yet reached the land," and there is still a lot of uncertainty, but she was optimistic about the adoption of CBDCs globally:

“Adoption of CBDCs is nowhere close. But about 60 percent of countries are exploring them in some form today.”

According to Georgieva, CBDCs can enhance financial inclusion in underbanked communities, provide resilience in developed economies, and take the place of cash.

CBDCs are a "safe and low-cost alternative to private money," according to Georgieva, and they can coexist with it.

Georgieva also emphasized the value of technological infrastructure for CBDC initiatives, safeguarding of personal data, and even the potential application of artificial intelligence (AI) to the improvement of national digital currencies.

She emphasized cross-border payment support in particular:

“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.”

The head of the IMF introduced the organization's CBDC virtual handbook, and mentioned the role played by the Bank for International Settlements (BIS) in the trials of digital money in the public sector.

The IMF has been actively analyzing the necessary regulations for cryptocurrency recently.

It put forth a crypto-risk assessment matrix on September 29 to help nations identify signs and catalysts of possible dangers in the industry.

October saw the unanimous adoption of the IMF's Synthesis Paper by G20 finance ministers and central bank governors, which was co-prepared with the Financial Stability Board.

Sources:

https://cointelegraph.com/news/imf-head-cbdcs-replace-cash-help-financial-inclusion

https://www.youtube.com/watch?v=qisFRnu4Q_s

https://www.imf.org/en/Topics/fintech/central-bank-digital-currency/virtual-handbook