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Investing.com – Central bank digital currencies have the potential to replace cash, but adoption could take time, Kristalina Georgieva, managing director of the International Monetary Fund, said on Wednesday.
“CBDCs can replace cash which is costly to distribute in island economies,” she said at the Singapore FinTech Festival on Wednesday. “They can provide resilience in more advanced economies. And they can improve financial inclusion where few people have a bank account.”
“CBDCs would offer a safe and inexpensive alternative [à l’argent liquide]. They would also provide a bridge between private currencies and a yardstick to measure their value, much like cash today that we can withdraw from our banks,” the IMF chief said.
The IMF reported that more than 100 countries are exploring the possibility of creating CBDCs, approximately 60% of the world’s countries.
“The level of global interest in CBDCs is unprecedented. Several central banks have already launched pilot projects or even issued a CBDC,” the IMF said in a report published in September.
According to a 2022 survey by the Bank for International Settlements, 93% of 86 central banks surveyed said they were exploring the possibility of creating CBDCs, while 58% said they probably would or could eventually issue a CBDC retail in the short or medium term.
However, as of June, only 11 countries had adopted CBDCs, another 53 were in advanced planning stages, and 46 were conducting research on the topic, according to data from the Atlantic Council.
Referencing a 2018 speech by her predecessor Christine Lagarde, when the former IMF head encouraged policymakers to follow the “winds of change” and explore the use of CBDCs, Ms. Georgieva said: “Five years later, I am delighted to see that CBDCs have become an essential tool for developing countries: “Five years later, I am here to take stock of this journey.”