The IMF predicts that Central Banks will issue digital currencies
The International Monetary Fund (IMF) believes that Central Banks can issue digital currencies in the future, according to an IMF report of June 27.
According to the full document, the IMF and the World Bank conducted a fintech survey that solicited responses from financial institutions of all member countries and based their conclusions partly on the 96 responses received.
According to the document, several Central Banks in different countries are considering implementing some form of Digital Currency of the Central Bank (CBDC). It was reported that Uruguay has already launched a CBDC pilot program, while the Bahamas, China, the Eastern Caribbean Currency Union, Sweden and Ukraine are “on the verge” of testing their systems.
In addition, several Central Banks have reportedly conducted research on the potential impact of the CBDC on financial stability, the structure of the banking sector, the entry of non-bank financial institutions and the transmission of monetary policy.
The motivation to offer a CBDC varies, according to the report. It is said that both emerging economies and developed economies are considering CBDC options, and the latter seek to provide an alternative to cash as their frequency of use decreases. For emerging economies in developing countries, on the other hand, the main outcome of a CBDC would be to reduce bank costs, as well as potentially make banks more available to unbanked citizens.
However, a similarity is that most of the Central Banks are not interested in issuing a completely anonymous CBDC, since the institutions want the transactions to be finally tracked by the authorities when necessary. However, some of these institutions are considering portioning a subset of reserved tokens for large holdings and transactions, and only making them traceable.
As previously reported by the Cointelegraph, conservative economist Stephen Moore recently joined a project to create an entity similar to the Federal Reserve for cryptocurrencies. The project, Decentral, is an attempt to regulate the supply of cryptocurrency to reduce volatility in the cryptography market.
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