Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), revealed on Monday that the financial agency is currently exploring a way to streamline the trading of central bank digital currencies (CBDCs) across countries.
Kristalina Georgieva: We Need Interoperability
The IMF executive shared the information at a conference held in Rabat, Morocco, and attended by African central banks.
“To have more efficient and fairer transactions we need systems that connect countries: we need interoperability. For this reason at the IMF, we are working on the concept of a global CBDC platform,” she said.
The IMF executive urged countries that have adopted CBDCs not to use the asset only for domestic purposes, which she believes will underutilize the asset’s capacity.
Georgieva’s comments come amid the declining use of physical banknotes and the increasing use of cryptocurrencies. This has caused financial banking institutions to explore virtual monetary systems like CBDCs. A CBDC is a digital form of money issued by a country’s central bank. The asset has the same value as the sovereign’s physical currency.
This is not the first time the Washington-headquartered financial agency will echo an interest in CBDCs. In April, the agency voiced its support for the growth of the central bank-issued digital assets, stating that it “may have a fundamental impact on both domestic and international economic and financial stability.”
Georgieva expects about 114 central banks that have ventured into CBDCs to bring heads together and agree on a singular framework that will foster global interoperability of CBDCs. She stated that a failure to do so will result in a flight to cryptocurrencies.
IMF Not In Support of Crypto
The IMF, on its part, has not shown support for cryptocurrencies like Bitcoin. In January 2022, the financial watchdog urged the El Salvadoran government to remove Bitcoin as a legal tender. The agency’s concern is that adopting a risky asset such as Bitcoin as legal tender could put the country in a financially destabilized situation.
Despite the concerns raised by the IMF, El Salvador has plunged deeper into the Bitcoin ecosystem, strengthening its position in the cryptocurrency.
