The world’s central banks need to agree on a common platform and rules to ensure global use of Central Bank Digital Currencies (CBDCs), International Monetary Fund Managing Director Kristalina Georgieva said Monday in a conference in Morocco, according to Reuters.
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Fast facts
- Georgieva said without such a CBDC platform and regulations a vacuum will be created and likely filled by cryptocurrencies, Reuters reported. The IMF previously discussed the idea of a global platform in its quarterly publication in September last year.
- The IMF director also said CBDCs should be backed by real assets, adding that cryptocurrencies not backed by assets are “speculative investments.”
- CBDCs can increase financial inclusion by making cross-border payments and remittances cheaper and quicker, Georgieva said in her press statement after the High-level Policy Roundtable on Central Bank Digital Currencies held in Rabat, Morocco.
- Sending money transfers via remittance service providers such as banks currently requires a 6.5% fee on average, Tobias Adrian, the head of the IMF’s monetary and capital markets department, said at the same conference. That’s equivalent to about US$45 billion of remittance fees a year.
- Georgieva also said 114 countries are currently exploring CBDCs, and about ten central banks are nearly ready to issue their digital currencies.
- However, in a sign of the difficulties in drawing up CBDC policies, the European Union has delayed the publishing of a draft bill to set the legal framework for digital euro development, according to a report by Coindesk. The report didn’t give a reason for the delay nor a source for the information.
- The bill has been delayed several times already and was leaked last week prior to its previously planned publishing date of June 28. Critics of CBDCs say they represent government overreach and intrude on individual privacy.
See related article: Inter-country use key for CBDCs to reach potential: report