Important crypto news for the blockchain industry from the IMF (International Monetary Fund), which has launched the development of a platform for the central bank’s digital currencies.
Let’s see in detail what it is all about.
Summary
IMF on crypto: all the latest news and initiatives
As anticipated, according to the latest reports, the International Monetary Fund (IMF) is currently developing a platform for central bank digital currencies.
Specifically, IMF Managing Director Kristalina Georgieva announced that the organization is actively working on this platform in order to facilitate transactions between countries.
All this is happening despite the fact that crypto are not enjoying a warm reception globally, while central bank digital currencies (CBDCs) are experiencing a period of great growth.
Indeed, in recent months, CBDCs have attracted increasing attention from regulators and political leaders around the world, who have been engaged in exploring and evaluating this emerging technology.
In this regard, Georgieva told the following at a conference in Morocco:
“CBDCs should not be fragmented national propositions… To have more efficient and fair transactions, we need systems that connect countries: we need interoperability.”
So, stating that this is the main reason, the IMF is currently devoting efforts to developing a global CBDC platform.
In addition, the organization expressed its desire regarding central banks reaching an agreement on a unified regulatory framework for digital currencies to promote interoperability globally.
Not surprisingly, it was pointed out that the absence of such an agreement could create a regulatory vacuum that could be occupied by cryptocurrencies.
Speaking about the development of CBDCs globally, Georgieva revealed that 114 central banks are currently involved in exploring CBDCs, with 10 of them having already made significant progress.
Finally, she emphasized the importance of CBDCs being backed by assets.
EU legislation for digital euro suspended
Recently, the publication of European Union legislation needed to support the digital euro was suspended, according to a report to CoinDesk.
Specifically, this decision was made following the leak of the draft legislation, which concerns privacy issues and technical aspects related to the central bank’s (CBDC) digital currency, and a statement by finance ministers questioning the rationale for the plan last week.
We also note that the timeline for the bill has been subject to repeated changes.
It was originally scheduled to be published by May, prior to a final decision by the European Central Bank on whether to issue the currency digitally.
The draft was scheduled to be discussed and published at a 28 June meeting of the European Commission‘s decision-making body, as indicated in a tentative schedule published last week.
However, the Commission did not provide an explanation for the delay or announce a new date for publication. Eurozone finance ministers discussed the plans at a regular meeting on Thursday.
During the talks, ministers stressed the importance of developing a compelling and clear narrative explaining the added value of this development in terms of its impact on the economy and the lives of citizens.
After chairing the meetings, Irish Finance Minister Paschal Donohoe said that within the institutions, ministers are supportive of this work and are also looking to further develop such a narrative.
“Project Rosalind”: a potential future digital pound
The Rosalind Project identified key design considerations for a possible future digital pound.
In particular, it explored detailed use cases for CBDCs, which to date have not gained significant support from policymakers in the UK.
The main focus has been on wholesale CBDCs, which would be available only for high-value transactions between banks and large corporations, excluding the general public.
However, Project Rosalind represents one of the most significant explorations to date by the Bank of England regarding a retail CBDC, considering peer-to-peer transfers, retail payments for goods and services, and small value commercial transactions.
However, although there is enthusiasm from some key Bank of England officials, there is still no broad consensus on the need for a digital pound.
Indeed, the Bank of England is tasked with assessing the implications of introducing this new technology and exploring different design options, but the final decision rests with parliament.
The report “Central bank digital currencies: a solution in search of a problem?” published last year by the House of Lords Economic Affairs Committee expressed skepticism about the real need for a digital pound and questioned the advantages of CBDCs over current payment and settlement systems in the UK.
Despite the uncertainties in parliament, Sir Jon Cunliffe said that “probably” the UK would need a CBDC this week, giving a seven-in-ten chance that the digital pound would be introduced.
However, he stressed that any move to introduce a new digital currency would still take years.
