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- The platform will enable transactions between countries once it is launched.
- It will be beneficial once new digital fiat currencies have gained widespread adoption.
The IMF is enhancing its backing for Central Bank Digital Currencies (CBDCs) being developed by nations around the world. As reported by Reuters, the IMF is creating a global platform aimed at improving CBDC interoperability.
IMF Managing Director Kristalina Georgieva stated on Monday that the platform will enable transactions between countries once it is launched.
It is widely recognized that payment systems like SWIFT have connected the global financial markets. While numerous governments are currently assessing the feasibility of CBDC innovations, the IMF is actively pursuing a future where more than half of all countries will have their own CBDC in circulation.
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Global Interoperability of CBDCs
The global CBDC platform being developed by the IMF will be advantageous once these new digital fiat currencies have become widely adopted. As Georgieva noted, the IMF is making significant efforts to encourage nations to agree on a common standard that would facilitate the global interoperability of CBDCs.
She reiterated that the technological foundations of CBDCs would be rendered ineffective if they are only utilized within their respective countries. Currently, 114 nations are engaged in the development of a CBDC, with 10% nearing completion, according to Georgieva.
In October 2020, the Central Bank of the Bahamas launched the first CBDC, known as the Sand Dollar. The Central Bank of Nigeria (CBN) has also rolled out its own digital currency, the e-Naira, making it the second country globally to do so.
Preliminary findings from the Bank of England (BOE) support the BOE’s plans to introduce its own CBDC, referred to as “Britcoin.”
Additionally, Banco de la Republica, Colombia’s central bank, and Ripple Labs, a blockchain payments company, have entered into a strategic partnership to explore the potential applications of the technology for Central Bank Digital Currency (CBDC).
