IMF predicts that central banks around the world will issue digital currencies (CBDCs)
According to a survey report by the International Monetary Fund (IMF) on June 27th, central banks around the world are likely to issue cryptocurrencies in the future.
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International Monetary Fund (IMF) and World Bank conducted a survey consulting all member countries on their views regarding "issuance of digital currencies," receiving 96 responses out of 189 member countries.
According to the report, central banks around the world are considering implementing specific forms of Central Bank Digital Currency (CBDC). Uruguay has already initiated a CBDC pilot program, while the Bahamas, China, the Eastern Caribbean Currency Union (ECCU), Sweden, and Ukraine are "soon" launching pilot projects.
Furthermore, central banks of various countries have expressed broad views on CBDC and are studying its potential impacts on financial stability, banking sector structure, involvement of non-bank financial institutions, and monetary policy transmission. About 20% of countries indicated they are exploring the possibility of issuing digital currencies, but formal issuance is still pending. The main reasons countries support issuing digital currencies include:
- Reducing costs
- Resisting competition from cryptocurrencies
- Enhancing efficiency in monetary policy execution
- Ensuring competitiveness in the payment market
- Providing the public with risk-free payment tools
Motives for CBDC vary among countries. Developed countries aim to seek alternatives to cash as its usage frequency declines. For developing countries, CBDC could lower bank costs and potentially make it easier for banks to serve the unbanked population.
Additionally, countries are uninterested in launching fully anonymous CBDC as central banks still aim to have the ability to trace transactions when necessary.
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