The International Monetary Fund (IMF) believes that central banks may issue digital currencies in the future, according to a report by the IMF on June 27
According to the full paper, the IMF and World Bank conducted a survey on fintech
that solicited answers from financial institutions within all member
countries, and has based its conclusions in part upon the 96 received
responses.
According to the paper, several central banks in
different countries are considering implementing some form of Central
Bank Digital Currency (CBDC). Uruguay has reportedly launched a CBDC
pilot program already, while the Bahamas, China, Eastern Caribbean Currency Union, Sweden and Ukraine are “on the verge” of testing their systems.
Additionally,
a number of central banks have reportedly been conducting research on
CBDC’s potential impact on financial stability, the structure of the banking sector, entry of nonbank financial institutions, and monetary policy transmission.
Motivation
for offering a CBDC varies, per the report. Both emerging economies as
well as developed economies are said to be considering CBDC options,
with the latter seeking to provide an alternative to cash as its
frequency of use dwindles. For emerging economies in developing
countries, on the other hand, the main upshot of a CBDC would be
reducing banking costs, as well as potentially making banks more
available to unbanked citizens.
One similarity, however, is that
most central banks are not interested in issuing an entirely anonymous
CBDC, as the institutions want transactions to ultimately be traceable
by authorities when necessary. However, some of these institutions are
considering portioning off a subset of tokens reserved for large
holdings and transactions, and only making those ones traceable.
As previously reported
by Cointelegraph, the conservative economist Stephen Moore has recently
joined a project to make a Federal Reserve-like entity for cryptocurrencies.
The project, Decentral, is a purported attempt to regulate
cryptocurrency supply in order to reduce volatility in the crypto
market.
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