The International Monetary Fund (IMF) thinks central bank digital currencies (CBDCs) could be a better bet than crypto.
Kristalina Georgieva, the managing director of the IMF, says in a new statement that CBDCs are gaining momentum after moving from conceptual discussions to actual experimentations.
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“Central banks are rolling up their sleeves and familiarizing themselves with the bits and bytes of digital money.
These are still early days for CBDCs, and we don’t quite know how far and how fast they will go. What we know is that central banks are building capacity to harness new technologies – to be ready for what may lie ahead.”
She notes that the IMF is supporting the 100 or so countries that are actively exploring CBDCs.
“If CBDCs are designed prudently, they can potentially offer more resilience, more safety, greater availability, and lower costs than private forms of digital money. That is clearly the case when compared to unbacked crypto assets that are inherently volatile. And even the better managed and regulated stablecoins may not be quite a match against a stable and well‑designed central bank digital currency.”
Recently, the IMF released a paper that includes an in-depth examination of six different CBDC projects.
The IMF has also previously warned that crypto assets pose consumer protection and financial stability risks and could eat away at the banking sector’s market share. The institution has also called for sweeping and synchronized crypto regulations across the globe.
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