Crypto News

Retail CBDCs bring unknown ‘consequences’ to financial system: IMF director

Retail CBDCs bring unknown ‘consequences’ to financial system: IMF director
© Copyright Image: Crypto Breaking News

A myriad of unforeseeable “consequences” will be brought about by retail central bank digital currencies (CBDCs), the managing director of the International Monetary Fund (IMF) claimed.

The IMF’s Kristalina Georgieva erred on the side of caution regarding retail CBDCs in a May 1 interview at the Milken Institute’s 2023 Global Conference.

Georgieva explained the IMF considers retail CBDCs to have far more room for error than wholesale CBDCs.

“We think that wholesale CBDCs can be put in place with fairly little space for undesirable surprises, whereas retail CBDCs completely transform the financial system in a way that we don’t quite know what consequences it could bring.”

Retail CBDCs are state-backed virtual currencies issued by central banks for use by consumers and businesses.

Wholesale CBDCs are similarly central bank-issued but are designed to allow financial institutions to carry reserve deposits with a central bank.

The IMF is collaborating with about 50 countries to ensure best practices are adopted, Georgieva said, which she expects to have a huge influence on the banks and economies in the future.

“We are engaging with countries, we work with some 50 countries now on this very topic,” the IMF executive said.

“We will see a very significant transformation that comes from CBDCs.”

Related: IMF examines CBDC design in context of Islamic banking, finds some risks magnified

Georgieva noted that “even” the United States is engaging in CBDC development now, which led her to conclude that “the future” of CBDCs is now here:

“Even in the U.S. where that was for quite some time a topic of not great interest, now there is engagement, and for the right reason. The future has arrived.”

The IMF announced on April 12 that it will publish a CBDC handbook to help central banks with CBDC design and implementation. The financial agency of the United Nations said the decision came following “unprecedented” levels of interest from nations around the world.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Source: Cointelegraph.com

The post Retail CBDCs bring unknown ‘consequences’ to financial system: IMF director appeared first on Crypto Breaking News.

Read more: https://www.cryptobreaking.com/retail-cbdcs-bring-unknown-consequences-to-financial-system-imf-director/

Text source: Crypto Breaking News

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
Buy & sell Crypto in minutes

Join BINANCE!

The world's largest crypto exchange

You're just steps away from receiving your reward.

The most complete Crypto News Center.

Search Stories:

Latest top stories