IMF chief: CBDCs could be safer and cheaper than cryptocurrencies


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Central bank digital currencies have become among the most popular topics of discussion among the governing monetary bodies as they try to find a way to reduce the impact of private cryptocurrencies.

The Managing Director of the International Monetary Fund believes that each country should follow its own path because one type of central bank digital currency will not work similarly in every country.

CBDCs are not a one-stop shop:

Daily reports, including what we publish here in Arab Bitcoin, show how central banks are making their way towards creating their own digital currencies, CBDCs, in an attempt to benefit from the digitization of money.

according to ReutersResearch by the International Monetary Fund estimated that nearly 100 of these organizations are currently working to launch their own version of digital currencies.

Several central banks are seeking to launch their own central bank digital currencies, including the central bank of China, Sweden and the Bahamas, all of which have reported access to highly advanced products, some of which have already seen the light of day.

However, given the different ways in which all these countries are governed, IMF Managing Director Kristalina Georgieva suggested that these early experiences offered different lessons.

For example, she believes that a “wisely” designed central bank digital currency can provide more flexibility to the local financial network while also reducing transaction costs.

Georgieva also told that such a digital product would be “safer” than cryptocurrencies, which are “unbacked” and “inherently volatile.”

However, she did not mention the negative points, on top of which is that CBDCs will also be highly centralized as they will be operated by central banks, unlike Bitcoin and other digital currencies that do not have a central authority.

In the end, Georgieva emphasized that there is no one-size-fits-all when it comes to CBDCs, adding:

It’s still early days for central bank digital currencies, and we don’t quite know how far and how fast it will go.

CBDC spread all over the world:

Regardless of the countries mentioned above, other countries that have made great progress in launching such products include South Korea, India, Malaysia, etc.

While the US Federal Reserve is still exploring the pros and cons of a central bank digital currency, the Prime Minister of India believes that a digital version of the country’s fiat currency will boost its economy.

Separately, Russia’s second-richest man recently confirmed that a central bank digital currency could replace bitcoin.

Read also:

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Report: Global Cryptocurrency Market Investment Surge 450% in 2021

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