The International Monetary Fund (IMF) wants to create a global central bank digital currency (CBDC) system in an effort to connect countries and allow seamless cross-border transactions, Reuters reported.
IMF Managing Director Kristalina Georgieva made the statement during a conference of African central banks in Morocco on June 19.
She said the IMF has already begun developing a concept for a global CBDC platform.
Domestic CBDC not enough
The IMF has been extremely supportive of various CBDC projects being developed by central banks across the globe and believes central banks need to develop their own digital currencies to compete with the threat of crypto.
As of June, roughly 10 countries are close to “crossing the finish line” in launching a CBDC, while more than 100 countries are in various stages of development.
However, these projects are primarily focused on creating digital versions of national fiat currencies, with interoperability mostly an afterthought. The few projects that have cross-border payments brewed into their foundation are limited to a handful of neighboring countries.
Georgieva said that central banks need to make global interoperability the primary focus of their projects and develop a common regulatory framework for digital currencies to support it.
According to Georgieva:
“CBDCs should not be fragmented national propositions… If countries develop CDBCs only for domestic deployment we are underutilizing their capacity.”
She further stated that if central banks fail to agree on common standards for digital currencies and do not create a global system, people will likely turn to cryptocurrencies to fill those gaps.
Crypto is speculative
According to Georgieva, cryptocurrencies that do not have real-world assets backing them should not be considered safe as they are a “speculative investment.”
The statement essentially covers almost every single cryptocurrency in existence as they do not have real-world assets backing them. The only cryptocurrencies that are backed by assets are stablecoins.
She said in a speech in February that the volatility of cryptocurrencies and the fact that they have no assets backing them makes them inherently less attractive to the average person than a central bank-backed CBDC.
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