IMF MD: CBDCs Can Replace Cash and Promote Financial Inclusion

Central bank digital currencies (CBDCs) can replace cash and promote financial inclusion, said Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) during an IMF seminar on November 14.

The IMF head encouraged the public sector to ‘keep preparing’ to implement CBDCs and ‘related payment platforms in the future.’ She highlighted the unprecedented global interest in CBDCs, noting that over 60% of countries are exploring them.

Georgieva believes that national digital currencies can not only serve as a cash alternative but also scale up financial inclusion, particularly for those outside of the formal financial system. According to her, technological infrastructure, personal data protection, and artificial intelligence (AI), play vital roles in enhancing CBDCs.

Moreover, the IMF Director emphasized the role of CBDC in facilitating cross-border payments. A number of financial institutions, such as JPMorgan, are exploring and developing solutions powered by blockchain technology to address the current challenges in cross-border transactions, including high cost, delays, and limited access.

In September, the IMF released working papers that analyzed macrofinancial risks from crypto assets and proposed a crypto-risk assessment matrix (C-RAM) to assist countries in identifying potential risks in the crypto sector.

Central bank digital currencies (CBDCs) have been widely discussed in recent years, with 79 countries exploring or developing CBDCs, 11 countries launching their national digital currencies, and 21 countries piloting CBDC projects, according to the Atlantic Council.