The IMF's Kristalina Georgieva told wholesale CBDCs, on the different hand, have “ fairly little space for undesirable surprises. ”
A myriad of unforeseeable “ consequences ” will be moved around by retail central bank digital currencies (CBDCs), the managing director of the International Monetary Fund (IMF) declared.
The IMF's Kristalina Georgieva erred on the hand of caution regarding retail CBDCs in a May 1 interview at the Milken Institute’s 2023 Global convocation.
Georgieva clarified the IMF considers retail CBDCs to have far further 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-supported virtual currencies published by central banks for use by consumers and businesses.
Wholesale CBDCs are also central bank-published but are designed to permit financial institutions to carry reserve deposits with a central bank.
The IMF is collaborating with around 50 countries to ensure best practices are adopted, Georgieva told, 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 the context of Islamic banking, finds some threats magnified
Georgieva remarked that “ indeed ” the United States is engaging in CBDC development currently, which led her to conclude that “ the future ” of CBDCs is currently 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 published on April 12 that it'll issue a CBDC handbook to help central banks with CBDC design and implementation. The financial service of the United Nations told the decision came following “ unprecedented ” levels of interest from countries around the world.
(BRAYDEN LINDREA, Cointelegraph, 2023)