The International Monetary Fund (IMF) has put its weight behind Central Bank Digital Currencies (CBDCs).
Kristalina Georgieva, the managing director of the IMF, says in a new statement that CBDCs are gaining momentum after moving from conceptual discussions to actual experimentations.
Georgieva said the fund is deeply involved in providing technical assistance to members test running the currency.
Nigeria launched its Central Bank Digital Currency (CBDC), the e-Naira in 2021 after banning private crypto currency transactions from official banking channels some months earlier.
Over 100 other countries including China, Bahamas and Sweden among others are experimenting with the CBDC, the IMF revealed.
Georgieva said, “If CBDCs are designed prudently, they can potentially offer more resilience, more safety, greater availability, and lower costs than private forms of digital money. That is clearly the case when compared to unbacked crypto assets that are inherently volatile.
“Even the better managed and regulated stable coins may not be quite a match against a stable and well-designed central bank digital currency.”
She explained that there is currently no universal case for CBDCs because each economy is different.
The IMF boss said the success of the digital currency is also hinged on private sector cooperation with apex banks.
According to the IMF, CBDC could provide an essential backup when other payment instruments fail.
Georgieva added, “We are supporting countries in their CBDC experiments—to understand big picture trade-offs, to provide technical assistance, and to serve as a transmission line of learning and best practice across all 190 members.
“We are stepping up collaboration with other institutions, such as the Bank for International Settlements, at par with the rapidly growing significance of digital money.”
