IMF Director Urges Global Preparedness for Central Bank Digital Currencies

At the Singapore FinTech Festival, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), encouraged the public sector to remain proactive in preparing for the eventual deployment of central bank digital currencies (CBDCs) and associated payment platforms. Georgieva expressed optimism about the global implementation of CBDCs but emphasized that the journey is ongoing, stating, "We have not yet reached the land." Currently, approximately 60 percent of countries are exploring CBDCs in various capacities.

Georgieva highlighted the potential of CBDCs to replace cash, enhance resilience in advanced economies, and promote financial inclusion in underbanked communities. She sees CBDCs as a "safe and low-cost alternative" coexisting with private money. Additionally, Georgieva underscored the significance of robust technological infrastructure, personal data protection, and the potential role of artificial intelligence (AI) in advancing national digital currencies.

A key focus of Georgieva's address was the importance of cross-border payment facilitation. She emphasized that if CBDCs are deployed, they should be designed to support cross-border payments, which are currently costly, slow, and limited in accessibility. Georgieva urged immediate action to lay the groundwork for efficient cross-border payment systems.

During the event, Georgieva introduced the IMF's CBDC virtual handbook and acknowledged the role of the Bank for International Settlements (BIS) in driving digital currency experiments within the public sector. The IMF has recently been active in analyzing the regulatory landscape for cryptocurrencies, proposing a crypto-risk assessment matrix on September 29. The IMF's Synthesis Paper, developed in collaboration with the Financial Stability Board, was unanimously adopted by G20 finance ministers and central bank governors in October.