Yesterday, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), shared her organization’s views regarding the future of central bank digital currencies (CBDCs). She said that while a wholesale option likely hides few surprises, the implications of retail CBDCs are still uncertain, talking at a Milken Institute event. The IMF is working with some fifty countries in this area and believes we will see “significant transformations” in the near future.
CBDCs have received an “unprecedented” level of interest in recent years. Over one hundred countries are at some stage of development and dozens have approached the IMF for technical assistance, so the fund has had to increase its digital money capacity to cope with members’ greater engagement. “Before the pandemic, we used to say the future is digital, and with the pandemic, the future has arrived,” Ms Georgieva said.
The key takeaway from the Director’s comments concerned the different risks of a wholesale or a retail option. “We think wholesale CBDCs can be put in place with fairly little space for undesirable surprises, whereas retail CBDCs completely transform the financial system in a way that we don’t quite know what consequences it could bring.”
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