Central bank digital currencies have become one of the most popular topics of discussion among the monetary authorities trying to find a way to mitigate the impact of private cryptocurrencies. However, the IMF general manager believes that each country should follow its own route, as one type of CBDC will not work in every country. No Solution Every day there are reports of new central banks hoping for the CBDC trend and trying to take advantage of the digitization of money. Cited by Reuters, an International Monetary Fund survey estimated that about 100 such organizations are currently working to launch their own version of fiat digital currency. The institution has investigated several such countries, including China, Sweden and the Bahamas – all of which have reported highly advanced products that are close to seeing the light of day. But given the different ways in which all these countries are governed, the IMF’s general manager – Kristalina Georgieva – suggested that these early experiences have provided several lessons. For example, she believes that a ‘prudently’ designed CBDC can provide the local financial network with greater resilience while reducing transaction costs. Georgieva also claimed that such a digital product will be “more secure” than cryptocurrencies, which are “unbacked” and “inherently volatile”. However, she did not mention that CBDCs will also be highly centralized, as they will be controlled by the central banks, unlike bitcoin and other crypto assets that do not have centralized authority. But in the end, Georgieva claimed that “no one size fits all” when it comes to a CBDC. “These are still early days for CBDCs and we don’t know exactly how far and how fast they will go.” – she concluded. CBDCs around the world Apart from the above countries, South Korea, India, Malaysia and other countries have undergone significant development in launching such products. And while the US Federal Reserve is still exploring the pros and cons of a CBDC, the Indian Prime Minister believes the digital version of the country’s fiat currency will bolster his economy. Separately, Russia’s second-richest man recently claimed that a CBDC could replace bitcoin. He joined Georgieva to highlight BTC’s volatility as a potential hurdle. Featured Image Courtesy of BNR SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to register and get $100 Free and 10% Off Fees on Binance Futures First Month (Terms and Conditions). PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.
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