Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said on Monday that the agency is working on a platform for central bank digital currencies (CDBCs) to enable transactions between countries.
Georgieva said the following at a conference attended by African central banks in Rabat, Morocco:
“CBDCs should not be fragmented national products… To have more efficient and fairer transactions, we need systems that connect countries: we need interoperability.
That is why we are working on the concept of a global CBDC platform at the IMF.”
“If We Cannot Create a Common Platform for Digital Currencies, Cryptocurrencies Will Fill This Gap”
The IMF wants central banks to agree on a common regulatory framework for digital currencies that would allow for global interoperability. Georgieva said that failure to agree on a common platform will leave a gap that will likely be filled by cryptocurrencies.
CBDC is a digital currency controlled by a central bank, while cryptocurrencies are almost always decentralized.
Georgieva said 114 central banks are currently at some stage of CBDC research and “about 10 have already crossed the finish line”:
“If countries develop CDBCs only for domestic use, we will underutilize their capacity.”
Stating that CBDCs can also help promote financial inclusion and make remittances cheaper, Georgieva noted that the average cost of money transfers is 6.3%, which corresponds to $44 billion annually.
Emphasizing that CBDCs should be backed by assets, Georgieva added that cryptocurrencies are an investment opportunity when backed by assets, but are a "speculative investment" when not backed.
According to the International Monetary Fund IMF, the institution is against Bitcoin becoming legal tender because it believes it could undermine the effectiveness of monetary policy, circumvent capital flow management measures and increase financial risks.
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