While taking the opportunity to slip another crypto bash, IMF's Kristalina Georgieva said CBDCs can become a safer option in the digital world.
While taking the opportunity to slip another crypto bash, IMF’s Kristalina Georgieva said CBDCs can become a safer option in the digital world.
Central bank digital currencies have become among the most popular topics of discussion among governing monetary bodies as they are trying to find a way to reduce the impact of private cryptocurrencies. However, IMF’s Managing Director believes that each country has to follow its own route as one type of a CBDC will not work in every nation.Reports emerge daily of new central banks that are hoping on the CBDC trend, trying to capitalize on the digitalization of money.
The institution has looked into several such countries, including China, Sweden, and the Bahamas – all of which have reported highly advanced products that are close to seeing the light of day. Yet, given the different ways all of these countries are ruled, IMF’s Managing Director – Kristalina Georgieva – suggested that these early experiences have provided various lessons.
For instance, she believes that a “prudently” designed CBDC can provide more resilience for the local financial network while also reducing transaction costs.Georgieva also claimed that such a digital product will be “safer” than cryptocurrencies, which are “unbacked” and “inherently volatile.” However, she failed to mention that CBDCs will also be highly centralized since they will be operated by the central banks, unlike bitcoin and other crypto assets that have no central point of authority.
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