International Monetary Fund (IMF) Considers Central Banks Issuing Digital Currencies
- IMF conducted a survey among central banks regarding CBDCs
- There are several banking institutions around the world ready to create their own CBDCs
The International Monetary Fund (IMF) considers that central banks could issue central bank digital currencies (CBDCs) in the future. This is according to a recent report that was released by the IMF on June 27.
Could Central Banks Issues CBDCs?
As per the report, the IMG and the World Bank have been working together so as to gather information about what financial institutions around the world are planning for their future. In order to do so, they conducted a survey on fintech that solicited answers from financial institutions in all the member countries and they received 96 responses from these banks.
There are several central banks in the world that have shown a real interest in creating a CBDC. Uruguay has launched a CBDC pilot programs and the Bahamas, China, the Eastern Caribbean Currency Union, Sweden and Ukraine are almost ready to test their new CBDC systems.
Some other central banks that instead of launching pilot programs have conducted extensive research on the matter, in order to learn more about the impact and potential influence on financial stability, the banking sector, and monetary policy transmission.
Banks have different motivations to start working with a CBDC. Each of the financial institutions has its own reasons behind such a decision. There are banks in emerging economies that have already been evaluating this possibility, and other countries in developed economies that are said to be considering the option of issuing one of these CBDCs.
One of the main benefits for developing economies is related to a reductio in banking costs. They can also make banks more available to unbanked citizens as well. Banks in both kinds of economies want to make transactions traceable. This is something that would help banks and governments have larger control over their populations. However, there are also some institutions that would only make traceable larger transactions among big clients.
At the moment, central banks and regulatory agencies around the world are discussing the effects that the Libra cryptocurrency is expected to have in the economy. There are some regulatory agencies that are requesting information from Facebook before allowing it to launch the virtual currency on their territories.