IMF MD Says Agency Working On Concept Of Global Central Bank Digital Currency Platform That Will Link Nations

International Monetary Fund Managing Director Kristalina Georgieva has reportedly said the fund is working on a platform for central bank digital currencies (CBDCs) to enable transactions between countries.

“CBDCs should not be fragmented national propositions… To have more efficient and fairer transactions we need systems that connect countries: we need interoperability,” Georgieva told a conference attended by African central banks in Morocco, according to a Reuters report. “For this reason at the IMF, we are working on the concept of a global CBDC platform,” she added.

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CBDC is a digital form of currency backed by the central bank of a country. Although the currency is said to offer many advantages like liquidity, it also comes with certain risks. According to the Federal Reserve, CBDCs raises a variety of important policy questions, including how it might affect financial-sector market structure, the cost and availability of credit, the safety and stability of the financial system, and the efficacy of monetary policy.

Common Framework: Georgieva said the IMF wants central banks to agree on a common regulatory framework for digital currencies that will allow global interoperability. Failure to agree on a common platform may create a vacuum that would likely be filled by cryptocurrencies, she stated.

Already 114 central banks are at some stage of CBDC exploration, “with about 10 already crossing the finish line,” Georgieva said according to the report. “If countries develop CBDCs only for domestic deployment we are underutilizing their capacity,” she added.

The IMF managing director pointed out that CBDCs could also help promote financial inclusion and make remittances cheaper while noting that the average cost of money transfers stands at 6.3% amounting to $44 billion annually.

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