According to Kristalina Georgieva, managing director of the IMF, digital currencies, supported by central banks, are the most reliable form of digital money. At the same time, it’s hard to think of cryptocurrencies like Bitcoin as money, believes the chief executive of an international financial institution.
IMF chief Georgia CBDC has identified top issues for policymakers exploring
Among the members of the International Monetary Fund (IMF), 110 countries are exploring the central bank’s digital currencies (CBDCs), the fund’s chairman and managing director Cristalina Georgieva said at an event hosted by the University of Bocconi in Italy. Speaking to the audience from a distance, he mentioned that the main challenge now for the currency authorities is to ensure the inter-operability of this currency.
Whether state-backed digital currency can serve as a reliable means of public exchange is a big consideration, according to Georgieva, Reuters reported Tuesday. Policymakers need to answer other questions, if CBDCs can contribute to domestic economic stability and how they fit into the international regulatory framework introduced by institutions such as the Bank for International Settlements (BIS).
BIS Innovation Hub is leading a number of projects to test the use of state-issued digital currencies in international transactions, such as cooperation between the Reserve Bank of Australia, Bank Negara Malaysia, the Financial Authority of Singapore and the Reserve Bank of South Africa. These include joint tests conducted by China, Hong Kong, Thailand and the UAE, and wholesale CBDC tests conducted by Bank de France and the Swiss National Bank.
Regarding cooperation between the International Monetary Fund and the National Financial Authority regarding CBDCs, Kristalina Georgieva added:
[It is] The international community, the central bank, organizations like ours are working hard to ensure that money is now a source of confidence in this fast-paced world of digitalisation and helps in the functioning of the economy. [being] A risk.
The IMF chief stressed that he sees digital currency issued by central banks as the most reliable form of digital money and commented that it is difficult to think of cryptocurrency as money. “De-facto assets” like Bitcoin are not supported by assets that keep their value stable and can rise and fall sharply, Georgiva insists in detail:
It is difficult to think of them as money in the history of money.
In his speech at the Italian academic event, the IMF chief also spoke of Europe’s efforts to address the challenges posed by the spread of Covid-1 of. Kristalina Georgieva noted that the Old Continent is now more prepared to avoid another debt crisis, such as the last global financial crisis with Greece. However, he stressed that governments need to plan their actions carefully as they move towards medium-term fiscal consolidation so that they can eliminate the burden of epidemic-related debt.
Do you think the International Monetary Fund will change its position on cryptocurrency in the future? Let us know in the comments section below.
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