LAGOS, Nigeria (VOICE OF NAIJA)-IMF Managing Director Kristalina Georgieva stated on Monday that the organization is developing a framework for central bank digital currency (CDBCs) that will permit trade between nations.
“CBDCs should not be a collection of disparate national proposals… Interoperability is necessary for more effective and equitable transactions, according to Georgieva, who spoke at a conference of African central banks in Rabat, Morocco.
“For this reason, at the IMF, we are working on the concept of a global CBDC platform,” she stated.
The IMF wants central banks to settle on a standard regulatory scheme for virtual currencies that will enable interoperability on a worldwide scale.
She said the absence of a unified platform would leave a void that cryptocurrencies will probably fill.
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Unlike cryptocurrencies, which are almost always decentralized, CBDCs are digital currencies that are managed by the government’s central bank.
There are currently 114 central banks exploring CBDC, “with about 10 already crossing the finish line,” she noted.
“We are underutilizing their capacity if countries develop CDBCs only for domestic deployment.”
She added that the average cost of money transfers is 6.3 percent, or $44 billion (about Rs. 3,61,300 crore) annually, and that CBDCs might assist advance financial inclusion and lower the cost of remittances.
Georgieva emphasized the need for assets to support CBDCs, saying that without such backing, cryptocurrencies are only “speculative investments” rather than a means of making investments.