During a conference attended by African central banks in Rabat, Morocco, IMF Managing Director Kristalina Georgieva unveiled the International Monetary Fund’s (IMF) ongoing efforts in developing a platform for central bank digital currencies (CBDCs) to facilitate cross-border transactions between nations.
Highlighting the significance of interconnectedness, Georgieva emphasized that CBDCs should transcend national boundaries rather than existing as fragmented propositions confined within a single country. She stated,
To foster more efficient and equitable transactions, we must establish systems that connect nations—embracing interoperability is crucial.
In line with this objective, the IMF is actively engaged in conceptualizing a global CBDC platform.
The IMF’s primary aim is to encourage central banks worldwide to establish a common regulatory framework for digital currencies, fostering global interoperability. Georgieva warned that failure to reach a consensus on a unified platform would create a void that could potentially be filled by cryptocurrencies.
Distinguishing CBDCs from cryptocurrencies, Georgieva clarified that CBDCs are digital currencies under the control of central banks, whereas cryptocurrencies predominantly operate in a decentralized manner.
As of now, approximately 114 central banks are in various stages of exploring CBDCs, with around 10 of them nearing completion, according to Georgieva.
Georgieva further emphasized that the potential of CBDCs remains largely untapped if countries solely develop them for domestic use. Expanding their utility globally is imperative to harness their full capacity.
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 currently stands at 6.3%, amounting to a staggering $44 billion annually.
Georgieva underlined the importance of CBDCs being asset-backed. She acknowledged that cryptocurrencies can be a promising investment opportunity when backed by assets, but cautioned against speculative investments in cryptocurrencies lacking such support.