SINGAPORE – The International Monetary Fund (IMF) has supported central bank digital currencies (CBDCs), with managing director Kristalina Georgieva highlighting their potential to improve financial inclusion and the development of financial technologies. Speaking at an event in Singapore, Georgieva highlighted that, while current adoption levels are low, more than half of the world’s countries are exploring the viability of CBDCs.
Georgieva noted that CBDCs could address costly cash distribution challenges, especially in island nations, and improve financial resilience in mature economies. They also promise to expand access in regions where traditional banking services are limited. The IMF chief emphasized that countries should prepare for the future deployment of CBDCs to counter emerging private digital currencies like Libra.
In her speech, Georgieva called for entrepreneurial thinking among country leaders, effective communication strategies, and incentives to encourage CBDC adoption. This approach would ensure its seamless integration into current financial systems and drive the growth of the fintech sector, which would require the active participation of the private sector.
At the Singapore Fintech Festival, Georgieva urged that countries continue to systematically explore CBDCs. She noted that more than 100 countries are investigating whether they are ready to implement such digital currencies. With CBDCs active in The Bahamas, Jamaica and Nigeria and significant development efforts underway in Brazil, China, Eurozone countries, India and the United Kingdom, CBDCs are gaining global traction.
The IMF has put together a virtual manual to guide policymakers through the changing CBDC landscape using a ‘5P methodology’ (ranging from preparation to production) and plans to keep it up to date with new global insights. This resource explores the monetary policy implications of CBDCs and how they can simplify the management of capital flows and promote financial inclusion.
As central banks consider new technologies to implement CBDCs, the IMF continues to offer its support. The organization is planning more publications in collaboration with international entities such as the Group of Twenty to expand its guidance on CBDCs over the next year.
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