SINGAPORE - International Monetary Fund (IMF) Managing Director Kristalina Georgieva has urged for the hastened creation of Central Bank Digital Currencies (CBDCs) to expand financial accessibility worldwide. Speaking at the Singapore FinTech Festival, she highlighted that over 100 countries are currently exploring the adoption of CBDCs, with a focus on their potential to replace cash and enhance financial inclusion, especially in developing economies and island nations where traditional banking infrastructure may be limited.
Georgieva pointed out that while only 11 countries have fully adopted CBDCs as of June 2023, a Bank for International Settlements survey indicated that 93% of central banks are considering retail CBDCs. The Bahamas, Jamaica, and Nigeria have already issued such digital currencies. She emphasized the efficiency CBDCs could bring to cross-border payments, which is crucial for swift capital allocation.
During her address, Georgieva revealed an upcoming joint initiative by the IMF and World Bank aimed at strengthening cross-border payment systems. She also announced the release of a CBDC handbook intended to serve as a guide for global policymakers navigating the new digital monetary landscape.
The role of artificial intelligence (AI) was also underscored in her speech. Tools like OpenAI's ChatGPT could significantly boost the benefits of CBDCs by providing quick credit scoring and personalized support to individuals with lower financial literacy levels. However, she maintained that ensuring personal privacy and data security is paramount as these technologies advance.
Georgieva's call for action resonates with the Monetary Authority of Singapore's stance on cash being generally incompatible with the evolving digital economy. The IMF chief's comments reflect a growing consensus on the importance of digital currencies in fostering a more inclusive global financial system, while also acknowledging the challenges and complexities involved in their implementation and regulation.
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