IMF Wants to Create a Global CBDC Platform to Counter Crypto Threats

The IMF believes that central banks need to create a global CBDC system to counter the threat of cryptocurrencies.

The International Monetary Fund (IMF) wants to create a global central bank digital currency (CBDC) system to connect countries and enable seamless cross-border transactions, according to Reuters.

IMF Managing Director Kristalina Georgieva made the statement at a meeting of African Central Banks in Morocco on June 19.

The International Monetary Fund has already started developing a concept for a global CBDC platform, she said.

Domestic CBDC is not enough

The IMF has been very supportive of the various CBDC projects being developed by central banks around the world, and believes that central banks need to develop their own digital currencies to counter the threat of cryptocurrencies.

As of June, about 10 countries were close to "crossing the finish line" in launching a CBDC, while more than 100 countries were in various stages of development.

However, these projects have primarily focused on creating digital versions of national fiat currencies, with interoperability mostly an afterthought. The few projects integrating cross-border payments into their foundations are limited to a handful of neighboring countries.

Central banks need to make global interoperability a top priority of their projects and develop a common regulatory framework for digital currencies to support it, Georgieva said.

According to Georgieva:

"CBDCs should not be fragmented national proposals... If countries develop CDBCs only for domestic deployment, we are not fully utilizing their capabilities."

She further stated that if central banks fail to agree on common standards for digital currencies and do not create a global system, people may turn to cryptocurrencies to fill these gaps.

Cryptocurrencies are speculative

According to Georgieva, cryptocurrencies that are not backed by real-world assets should not be considered safe because they are a “speculative investment.”

This statement essentially covers almost all cryptocurrencies in existence, since they are not backed by real-world assets. The only asset-backed cryptocurrencies are stablecoins.

The volatility of cryptocurrencies and the fact that they are not backed by assets makes them inherently less attractive to ordinary people than central bank-backed CBDCs, she said in a speech in February.