IMF Prepares a Global Platform to Ensure CBDC Interoperability

The central bank digital currency (CBDC) is slowly taking place among the interests of financial institutions around the world. Both national and international institutions are looking at its potential and are seeking to deploy to leverage the technology. Recently, the International Monetary Fund (IMF) is reported to be working towards the concept of a global CBDC platform. 

Bloomberg reported on Monday, January 19, IMF Managing Director Kristalina Georgieva stating how the financial institution is working on a global infrastructure for interoperability between digital currencies settlements, primarily to bring different national central bank’s issued digital currencies on a global platform. These platforms were said to ensure avoiding the “underutilization” of CBDCs. 

Georgieva was speaking at a conference in Rabat, Morocco. She said the IMF is working towards ensuring “interoperability.” For this to happen, it would need a mutually shared infrastructure in order to neglect the situation of “settlement blocks.” Such blocks would be crucial to avoid the breakage. 

The world is moving towards digital currencies and it’s evident from lowering use of cash and equivalents. Given the ongoing financial trend, many economies around the world are also looking to flow where the current is—towards digital currencies. 

Many countries are at different stages regarding the CBDC development. The Atlantic Council CBDC tracker shows out of 120 countries it keeps watch on, less than 10% has successfully launched their own central bank digital currencies. 

The eleven countries launched digital currencies in their region includes Nigeria, the Bahamas, Jamaica and eight Eastern Caribbean countries, while the number of countries with their CBDC projects under pilot phase are 18. However, it includes some of the prominent economies including Japan, China, Russia, India, Singapore, Australia, South Korea, etc. The United States, Canada, United Kingdom, and European countries are in the process of developing one. 

The IMF chief noted out of fourteen central banks across countries in the process of exploring the issuance of nation-wide digital tender, ten are on the brink of reaching the “finish line.” However, the discussion on regulating the digital currencies is yet to reach a decisive point. 

The London Hub of Bank of International Settlements (BIS) and Bank of England are reported to be done with their CBDC related experiment dubbed Project Rosalind. Within the project, the institutions tried out over 30 different use cases of digital currencies and developed 33 applications programming interfaces (APIs). 

The Head of BIS Innovation Hub London Centre, Francesca Hopwood Road, said the APIs designed under the project are meant to support payment safely and securely. The success of this report is also said to be another step towards Britain’s own digital currency, “Britcoin.”

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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