IMF Proceeds With Caution: Central Bank Digital Currencies Get Approved

IMF proceeds with caution after it approved central bank digital currencies and recommended to the banks to explore the introduction of the assets as well as we are about to see further in the altcoin news.

In the latest weekly blog posts, the IMF proceeds with suggestions that CBDC has a lot of benefits. These include reducing the cost of managing the monetary policy and to help the unbanked get included in the financial system from which the entire banking system has excluded them. The organization suggested:

 “Some central banks are concerned by the increasing concentration of the payment system in the hands of few very large companies (some of which are foreign). In this context, some central banks view CBDC as a means to enhance the resilience of their payment system.”

The Washington-based organization had a very interesting relationship with cryptocurrencies with one-time managing director Christine Lagarde who suggested the authorities ‘’fight fire with fire’’ into pursuing the crypto crime. She spoke later about the benefits of crypto assets and the International Monetary Fund has now even a new chief in Bulgaria, the economist Kristalina Georgieva.

However, the huge organization has warned the central banks to proceed with caution because of the many risks of issuing central bank digital currencies and among them, the most prominent are the risks that emerge for the banking systems within the countries. As the IMF said:

 “Deposits could be withdrawn from commercial banks, should people decide to hold CBDC in significant volume.”

There is also an overall increase in central bank interest since Facebook’s Libra announcement and now the International Monetary Fund sees a centrally issued crypto as having a huge potential to play a very positive role in the economic life and monetary policy management.  As per the previous news regarding central bank digital currencies, Lagarde suggests that the European Central Bank will have to determine objectives for the cryptocurrencies taskforce in 2020 according to her speech at the first policy meeting. The ECB president Christine Lagarde is known to be one of the major supporters of crypto in the community.