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Summary: IMF’s report on CBDC advocates information-sharing among countries for successful roll-out

Taking stock of projects in advanced stages, the IMF proposed ways to operationalise CBDCs and navigate their risks.

There is no universal design or recipe to implement central bank digital currency (CBDC), the International Monetary Fund (IMF) asserted in its report on the challenges and implications of CBDCs in six different countries. It further recommended that countries should share information and insights from their projects, and extend cooperation on policy and design issues of CBDCs. Key takeaways from the report: The IMF does not think that countries will have to choose between centralised and distributed technology, and central banks could adopt CBDCs that utilise different technologies for different ends. It pointed out that all CBDCs currently in circulation have design characteristics that limit competition with bank deposits. Countries are looking to balance key aspects of the traditional monetary and financial system while reinventing the role of central banks in the digital era. They will find it difficult to make choices in a field which is rapidly-evolving, and deal with costs associated with the development process. Countries should not shy away from pushing the boundaries of innovation to explore features such as off-line capacity. The report offers insight that may help nearly 90 countries, including the US, China, Russia, and many in the EU, currently exploring CBDCs. India is looking to introduce its CBDC in early 2023 as deliberations on its design and security are currently underway at the Reserve Bank of India. What are the operating models identified by the IMF? The report examined six advanced CBDC projects in The Bahamas, China, Canada, Organisation of Eastern Caribbean States, Sweden, and…

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

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