IMF Weighs the Pros and Cons of a Central Bank Digital Currency
IMF assessed the pros and cons of CBDC
Digital currencies will open up new business opportunities
CBDC is a new joint project for business and government
Russia is in no hurry to introduce the digital ruble
The importance of creating a digital currency for central banks of the country was discussed last year, and some states are already testing CBDC Paper bills and coins may be a thing of the past due to a new financial instrument – digital currency of central banks (CBDC).
More. For example, China and India have already implemented digital currencies and are conducting the first tests of its effectiveness, and Venezuela is already paying salaries and pensions to its citizens in digital currency Petro. The governments of Germany and Italy announced the launch of their own digital currency earlier, however, due to the coronavirus epidemic that covered Europe, the launch of CBDC had to be postponed.
However, the governments of countries that have already launched digital currencies report only positive results to the international community, keeping silent about the possible risks and problems. For example, in Venezuela, after the introduction of Petro, small businesses were closed, and the older population has not learned how to replenish a digital wallet or pay for goods with digital money..
To dispel doubts and guesses of officials about digital currencies, Deputy Head of the International Monetary Fund Tao Zhang spoke about the pros and cons of using CBDC. In particular, Zhang attributed to the advantages of using digital money the creation of an effective electronic payment system, the expansion of financial accessibility, the reduction of barriers to entry of new firms into the payment system, the strengthening of monetary policy, and the prevention of the launch of new cryptocurrencies..
Zhang cited the likely increased costs for the central bank as a clear disadvantage of using central bank digital currencies..
A possible solution to the problem would be cooperation between central banks and private businesses. As Zhang explained, private companies or corporations could issue coins on their own, which would be backed by a central bank reserve and would be under the direct supervision of the financial department..
Russia vs CBDC
While other countries discuss the likelihood launching digital currencies, Russia rejects any attempts to launch CBDC. According to officials, the Russian fiat ruble should remain the only payment instrument in the country. In addition, the use of CBDC assumes a transparent payment system where the recipient and sender of funds will be visible. Then the question of confidentiality of transfer data arises, which is especially important for large corporations and companies..
While Russia is ready to observe the experience of other countries and learn from their mistakes and achievements.
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