Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said on Monday that the institution is working on a platform for central bank digital currencies (CDBCs) to enable transactions between countries.
Georgieva said at a conference of African central banks in Rabat, Morocco:
“CBDCs should not be fragmented national products… We need systems that connect countries to have more efficient and fairer transactions: we need interoperability.
That is why we are working on the concept of a global CBDC platform at the IMF.”
"Cryptocurrencies will fill this gap if we can't create a common platform for digital currencies"
The IMF wants central banks to agree on a common regulatory framework for digital currencies that will allow for global interoperability. Georgieva said that the failure to agree on a common platform will likely leave a vacuum that will be filled by cryptocurrencies.
While CBDC is a central bank-controlled digital currency, cryptocurrencies are almost always decentralized.
Georgieva said that 114 central banks are currently in a phase of CBDC research and "about 10 have already crossed the finish line":
“If countries develop CDBCs for local use only, we are underutilizing their capacity.”
Stating that CBDCs can also help encourage financial inclusion and make remittances cheaper, Georgieva noted that the average cost of money transfers is 6.3%, which is equivalent to $44 billion annually.
Emphasizing that CBDCs should be backed by assets, Georgieva added that cryptocurrencies are an investment opportunity when backed by assets, but a "speculative investment" when not backed by assets.
According to the International Monetary Fund (IMF), the institution is against Bitcoin being a legal tender because it believes it could weaken the effectiveness of monetary policy, circumvent capital flow management measures and increase financial risks.
*Not investment advice.
