With the current discussion about central bank digital currencies (CBDCs) the International Monetary Fund IMF is reviewing its potential role in the future of sovereign digital currency issuances as we are about to find out more in the latest cryptocurrency news.
In an analysis posted on the IMFBlog earlier in December of 2019, the IMF discussed the potential role of the institution on the emerging discussions about the central bank digital currencies (CBDCs) and also the good and the bad consequences of sovereign digital currencies.
According to the blog, the IMF is looking into three zones in which the institution can be of assistance to states that want to start their own central bank digital currencies (CBDCs). An excerpt from the blog post says:
“The IMF can help in three ways: by informing the policy debate, by convening relevant parties to discuss policy options and by helping countries develop policies. Because CBDC is a novel topic, the IMF has mostly been active in the first two areas, but it is gradually moving into the third area as member countries consider CBDC options and seek advice.”
Regarding central bank digital currencies (CBDCs), the IMF says that besides the disadvantages like banking disintermediation and international policy implications, sovereign digital currencies really poses certain advantages.
Agustin Carsten, head of the Bank of International Settlements (BIS) remarked at the beginning of this month that central banks were risk of losing their influence on private cryptocurrencies. The former head of the Peoples Bank of China, the central bank of China, argued earlier this year that Libra will work quite better if it is under the control of the IMF.
As with the other remarks on the theme of central bank digital currencies (CBDCs), the IMF connected the growth of activity around sovereign digital currencies to the publicization of the Libra project. Since the publishing of the Libra white paper and the inauguration of the Libra Association, certain central banks have accelerated their own central bank digital currencies (CBDCs) plans.
Therefore, some experts already started to predict a powerful central bank digital currencies (CBDCs) race that will characterize the cryptocurrency market in 2020. As reported in previous articles by DC Forecast, nations like China, Sweden, Lithuania and an expanding group of states start to study central bank digital currencies (CBDCs) scenarios.
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