georgia: CBDCs are reliable and 110 countries are considering the creation of CBDCs: IMF Managing Director

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, highlighted the importance and reliability of CBDCs at an annual G20 event held at Bocconi University in Milan, Italy, October 5. Georgieva said that according to the IMF survey, 110 countries are at some stage in establishing and exploring their CBDCs. These are more than half of the central banks with which the IMF deals. She highlighted the BIS pilot project, showing faster and cheaper payments with CBDCs.
She reminded the audience of the much talked about digital future that arrived with the pandemic, in the form of digital money. Georgieva spoke about the opportunities that have presented themselves with the advent of the digital revolution. She called CBDCs more reliable and stable because they are supported by the government and integrated into monetary policy. She said that in comparison, cryptocurrencies are too volatile to be considered cash.
Georgieva said that three components of digital currency – CBDC, stablecoins and virtual currencies – need to be differentiated and not merged in order to understand and avoid risks and benefit from digital currency. The main risks highlighted by Georgieva are public confidence and national stability, which can be guaranteed through the establishment of rules and regulations.
To mutually benefit the international economy, digital infrastructure needs to be extended and people need to be aware of recent innovations. She stressed the need for transparent and efficient tax systems as well as a global minimum corporate tax are essential to mobilize income for transformative investments.
She also spoke about the rapid pace of testing and deployment of CBDCs around the world. The Bahamas were the first to launch their CBDC, the Bahamian dollar in 2019, and China is ahead of the rest in testing its digital yuan. India is also moving towards the launch of CBDC.
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