IMF Spring Meeting on “Money and Payments in the Digital Age” Says Crypto Payments Inevitable
According to a recent report by the Financial Times, the International Monetary Fund (IMF) and the World Bank are launching their own permission blockchain and a token called “learning coin.” The purpose of these tools will be to study the application of blockchain and cryptocurrency technology. As the report pointed out, the coin was developed to
“better understand the technologies that underlie crypto assets.”
As for the application that will come with the learning coin, it will be a center for blogs, presentations, research, and videos. The IMF and World Bank plan on using the Learning Coin internally so that they can explore and experiment with blockchain technology.
A point that the Financial Times stressed is that even though the asset class is similar to a cryptocurrency, it is not one. Further, the coin may not have a monetary value. However, the development of such technology by two financial powers is certainly a valuable move. The Financial Times discussed the development of crypto-assets and distributed ledger technology in its report, stating,
“The development of crypto-assets and distributed ledger technology is evolving rapidly, as is the amount of information (both neutral and vested) surrounding it. This is forcing central banks, regulators and financial institutions to recognize a growing knowledge gap between the legislators, policymakers, economists and the technology.”
The IMF also had a number of spring meetings scheduled. One of the meetings is Money and Payments in the Digital Age. This presentation was moderated by Christine Lagarde, the managing director of the IMF. Speakers included Benoit Coeure, Patrick Njoroge, Sarah Youngwood, and Jeremy Allaire. Youngwood, who is the CFO of JPMorgan Chase shared that the new digital coin can be used to settle wholesale payments instantly. Patrick Njoroge, who is of the Central Bank of Kenya discussed mobile payment service M-Pesa. As for Benoit Coeure, who is a board member of the European Central Bank, discussed TIPS, which is a cost-effective service that promotes settlement of instant payments. Jeremy Allaire, the CEO of Circle, gave a view of the future which features a design in how societies fundamentally work.
Though each speaker had their own points to make, there seemed to be a general theme to the discussion and each speaker’s statements, which was trust. Discussions involved trust in an open network, trust in incumbent financial institutions, and trust and stability in our system. Lagarde participated in an interview after the panel, in which she touched upon blockchain
“disruptors” and that they are “shaking the system” and “changing business models of commercial banks.”
Another that took place during the Spring Meeting was New Economy Talk: CBDC: Should Central Banks Issue Digital Currencies. This meeting was moderated by Tommaso Mancini-Griffolio, who is the IMF’s Division Chief of the Money and Capital Markets Department. He led a discussion involving Cecilla Skingsley and Timothy Lane, who are the Deputy Governors of the Swedish Riskbank and Bank of Canada, respectively. The term “cryptocurrency” was mentioned once during the discussion in relation to Skingley’s statement that “other versions of money could come in, perhaps cryptocurrency.”
These discussions may signal a more crypto-friendly atmosphere amid financial institutions in the future.