The International Monetary Fund or IMF is making headway in creating a unified global CBDC platform with the help of regulators and policymakers around the world.
Kristalina Georgieva, IMF Managing Director stated that the pilot project would facilitate easier transactions between countries.
The majority of the world’s top financial leaders and authorities have viewed cryptocurrencies and stablecoins with mistrust, alleging that they are used as a cover for unlawful operations like money laundering.
As a result, CBDC has been pushed as the superior alternative because it is governed by a central body. Georgieva, however, believes that the current system is disorganized and places an emphasis on interoperability.
“We are working on a principle of interoperability. That concept would involve a shared infrastructure that would avoid the emergence of “settlement blocks,” which is the “last thing we want” to avoid further economic fragmentation,” Georgieva said at a conference in Morocco.
The IMF has also urged central banks to agree on a single regulatory framework for digital currencies in order to improve global interoperability.
Gerorgieva added that the lack of such an agreement might encourage the growth of cryptocurrencies and other asset classes.
According to the Atlantic Council, 114 nations, representing over 95 percent of the global gross domestic product, are exploring a CBDC, compared to only 35 countries back in May 2020.
Till now, 11 countries have launched a central bank digital currency and all G7 economies have moved into the development stage of a CBDC.
IMF Says Private Issuances Of Cryptocurrencies Pose Risk
While the IMF is championing digital currencies, it did not endorse a blanket ban on crypto assets yet, although that possibility is still open. Georgieva recently vouched for the regulation of the private issuances of cryptocurrencies.
The top exec spoke on the significance of the state-backed central bank digital currencies over publicly issued crypto assets and stablecoins.
According to Georgieva, non-backed digital assets are regarded as speculative, high-risk, and not a legitimate form of currency, fully-backed stablecoins are viewed as having economic advantages.
Furthermore, in partnership with the Financial Stability Board and the Bank for International Settlements, the IMF is getting ready to publish regulatory framework guidelines in the second half of the year.