- The platform will facilitate transactions between nations once it was introduced.
- It will be useful once new digital fiat currencies have become widespread.
The IMF is stepping up its support for Central Bank Digital Currencies (CBDCs) being developed by countries throughout the globe. According to Reuters, the IMF is working on a worldwide platform to improve CBDC interoperability.
IMF Managing Director Kristalina Georgieva said on Monday that the platform will facilitate transactions between nations once it was introduced.
It is common knowledge that payment systems like SWIFT have linked the world’s financial markets. While several governments are currently exploring the viability of CBDC innovations, the IMF is actively working toward a future in which more than half of all nations will have their own CBDC in circulation.
Global Interoperability of CBDCs
The global CBDC platform established by the IMF will be useful once these new digital fiat currencies have become widespread. As Georgieva explains, the IMF is exerting great effort to persuade nations to settle on a unified standard that would allow for the worldwide interoperability of CBDCs.
She stressed again that CBDCs’ technological foundations would go to waste if they are exclusively used in the home turf. Currently, 114 nations are working on building a CBDC, and 10% are nearing completion, according to Georgieva.
In October 2020, the Central Bank of the Bahamas issued the first CBDC, which it called the Sand Dollar. The Central Bank of Nigeria (CBN) has also introduced its own digital currency, the e-Naira, making it the second nation in the world to do so.
Initial findings from the Bank of England (BOE) support the BOE’s intention to launch its own CBDC, also known as “Britcoin.”
Moreover, Banco de la Republica, Colombia’s central bank, and Ripple Labs, a blockchain payments firm, have inked a strategic partnership agreement to study the technology’s potential uses for Central Bank Digital Currency (CBDC).