IMF Focuses on Cross-Border Integration Platform for CBDCs

The International Monetary Fund (IMF) is actively working on a solution to make it easier for different central bank digital currencies (CBDCs) to integrate and ease cross-border payments. This strategy, according to IMF Managing Director Kristalina Georgieva, aims to stop CBDCs from being underutilized and promote their growth into global markets.

Georgieva underlined the value of interoperability when speaking at a conference in Morocco. stating, “CBDCs should not be fragmented national propositions. To have more efficient and fairer transactions, we need systems that connect countries: we need interoperability.”

Georgieva further emphasized how this interoperability use case requires international CBDC regulation. If this issue is not resolved, cryptocurrencies may become more popular as replacements, stepping in to fill the gap left by the absence of coordinated CBDC frameworks.

Ten of the 114 central banks presently studying CBDC initiatives are already making substantial strides toward implementation, according to the IMF Managing Director.

CBDCs Bring Benefits and Opportunities

Georgieva highlighted the potential advantages of CBDC adoption, claiming that doing so might “help to increase inclusion” and “strengthen the resilience and efficiency of payment systems.” She also emphasized the opportunity to lower the average cost of cross-border payments and remittances, which is now 6.3%, or $44 billion in yearly service provider fees.

Georgieva distinguished between bitcoin assets and CBDCs, stating that she preferred the latter since she saw them as trustworthy investment prospects. Her description of unbacked cryptocurrencies, in contrast, was that they were “speculative investments.”

The creation and application of CBDC has advanced in a number of nations. For instance, China has already developed its own CBDC, the e-yuan, which is now utilized in some areas for wage payments. But according to recent rumors, a cryptocurrency corruption investigation may lead to the liquidation of Venezuela’s state-issued digital currency, the petro.

A digital euro that would be issued by the European Central Bank (ECB) and would largely be focused on providing effective payment rails for Europeans is also being considered by the ECB.