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The Managing Director of the IMF stated that CBDCs could effectively replace cash. 130 countries are exploring the concept of CBDC. In a recent speech at the Singapore FinTech Festival on the 15th of November, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), expressed her perspective on the role of Central Bank Digital Currencies [CBDCs] in economies. Some institutions, such as the European Central Bank (ECB), have maintained that CBDCs won’t replace physical cash. However, Georgieva’s remarks suggest a more nuanced perspective, indicating that such a transition could be beneficial for certain economies. CBDCs advocated for cash evolution and financial inclusion During her speech, Georgieva emphasized the cost-effectiveness of CBDCs in island economies, where distributing physical cash is a cumbersome process. She pointed out that CBDCs could also contribute to the resilience of more advanced economies. Additionally, Georgieva underscored the potential for CBDCs to improve financial inclusion. This is especially true in regions where a significant portion of the population lacks access to traditional banking services. Despite acknowledging the current uncertainty surrounding CBDC applications and the relatively low adoption rates, Georgieva encouraged innovation in this space. She emphasized that it is not the time to step back. Moreover, she urged the public sector to continue preparations for deploying CBDCs and related payment platforms in the future. Georgieva further advocated for designing these platforms with a focus on facilitating cross-border payments. Currently deemed expensive, slow, and accessible to only a few, cross-border transactions could significantly benefit from the integration of CBDCs. While the Bank for International Settlements (BIS) and other financial institutions have called for countries to establish relevant legislation supporting CBDCs, major jurisdictions have yet to make definitive decisions on their issuance. Georgieva echoed the recent comments by BIS Chief Agustin Carstens, asserting that CBDCs will play a…

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Filed under: News - @ November 15, 2023 7:24 pm