IMF Reveals Global CBDC Platform to Ensure Interoperability

Central bank digital currencies (CBDCs) are paving their way into traditional financial systems with legitimization from institutions globally. International financial institutions like International Monetary Fund (IMF) and Bank of International Settlements (BIS) are seen to indulge in CBDC and its infrastructural development. An IMF advisor recently showcased the ways by which CBDC could revolutionize global finance.

IMF Initiative to Bring CBDCs on a Singular Platform

Financial Counsellor and Director of the Mentary and Capital Markets Department at the IMF, Tobias Adrian, delivered a speech at the Bank Maghrib-High Level Policy Roundtable on CBDC at Rabat Morocco. During the speech, he proposed a cross border and domestic payments infrastructure enhancement plan based on traditional money. He said it has potential to direct the financial transactions of the new age.

Adrian highlighted the inherent issues with international payment such as high transaction fees, slow pace of payment processing, and lack of transparency, etc. He added that many international financial institutions other than the IMF including the World Bank, Bank of International Settlements and the Financial Stability Board (FSB) are also working towards eradicating the issues for the better.

In his speech, he proposed a trusted ledger as a potential solution focused on providing a secure and reliable electronic system. He brought the concept of such a platform dubbed “XC.”

This platform would facilitate services like cross-border payments and contracting. Settlement, programming of financial contracts and management of information were said as the three main elements of this solution. A single ledger XC platform would prevail over the digital representations of CBDCs and facilitate their exchange.

“Expressed in today’s language, the vision is for a trusted ledger, which is essentially an electronic document representing property rights on which digital versions of central bank reserves in any currency can be traded among participants.”

IMF Director Indicated the Initiative

Earlier, the IMF Managing Director Kristalina Geargiva reported to talk about the preparation of a global infrastructure focusing on interoperability of digital currencies around the world. The efforts came in the wake of intentions to bring various CBDCs of the countries worldwide on a global platform. This way, the platform would help in resolving the issue with underutilization of CBDC capabilities.

Georgia had also attended the conference at Morocco and talked about IMF’s efforts towards CBDC interoperability.

Crypto Community Is Not in Support

Though the efforts of the International Monetary Fund could be considered positive, the broader crypto community does not resemble the idea. Crypto community members have registered their strong condemnation against the initiative towards advancement of CBDC supporting technologies.

The emotions erupted on the social media platforms. For instance, a Reddit user stated the IMF is back with its old strategy of accumulating “more power and control” over the CBDCs brought by countries around the world.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing