IMF Is Working Hard on a Global CBDC Concept, Director Georgieva Said: Bloomberg News

IMF Is Working Hard on a Global CBDC Concept, Director Georgieva Said: Bloomberg News

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International Monetary Fund Managing Director Kristalina Georgieva said that the agency is “working hard on a concept of global infrastructure” to make sure there is interoperability of settlements between digital currencies that are issued by national central banks, according to Bloomberg News.

“We are working on a principle of interoperability,” she said. That concept would involve a shared infrastructure that would avoid the emergence of “settlement blocks,” which is the “last thing we want” to avoid further economic fragmentation, Georgieva said at a conference in Morocco.

Georgieva has been managing director of the IMF since 2019 and was previously the CEO of the World Bank.

CBDCs around the world

So far 11 countries have launched a central bank digital currency and all G7 economies have moved into the development stage of a CBDC, according to the Atlantic Council.

Now 114 countries, representing over 95 percent of global gross domestic product, are exploring a CBDC, when in May 2020, only 35 countries were considering it, the council said.

Advocates for a CBDC say they can provide better financial services to their citizens, while critics warn that CBDCs could violate privacy.

The US is looking into the creation of a CBDC, but a US Treasury official said last week that the agency is looking into privacy behind a CBDC.

A retail CBDC has pros and cons, said Graham Steele, assistant secretary for financial institutions at US Treasury, on Tuesday at the Transform Payments US 2023 Conference in Texas.

One challenge of a retail CBDC could be privacy, Steele said.

Some lawmakers have staunchly opposed a CBDC due to privacy concerns.

Florida Governor Ron DeSantis, and now Republican presidential candidate, signed a bill last month, banning CBDCs, and said Florida was the first state to do so.

“The movement to establish a central bank digital currency is an attempt to surveil & control the finances of Americans. It would violate privacy, limit consumer choice & undermine market competitiveness,” DeSantis tweeted in March.

Republican Sen. Ted Cruz of Texas has also suggested banning the US Federal Reserve from issuing a CBDC, and introduced a bill in March 2022 that would ban the Fed from developing a direct-to-consumer CBDC.