IMF: Central Banks Should Leverage Cryptocurrency Innovations

The International Monetary Fund (IMF) released a report calling cryptocurrencies “open” and “adaptive,” making them the key to an ideal monetary system.

IMF analysts noted that the traditional monetary system is good only in its stability and security, but in all other parameters it can be improved. Cryptocurrencies, in turn, are highly innovative, open and able to adapt to changing conditions in financial markets. This makes them the key to creating a future ideal monetary system.

At the same time, cryptocurrencies, according to IMF analysts, also have significant disadvantages, including a lack of stability, efficiency, and opportunities for integration into the current financial system. Indeed, the collapse of the Terra ecosystem shook the entire cryptocurrency industry, but had little effect on the traditional financial system.

Therefore, the report notes, when creating a future financial system, it is necessary to combine the advantages of traditional money and cryptocurrencies. This is possible when creating government cryptocurrencies (CBDC).

“CBDCs can provide new technical capabilities, including programmability, composability, and tokenization, which will open up useful opportunities for end users. In addition, they can act as digital money, make payments fast and secure, and the transaction fee can be as low as 0.2%. Many Central Banks are already working on such projects. At the global level, state cryptocurrencies can provide direct transactions between different central banks. Digital technologies promise a bright future for the monetary system,” IMF analysts write.

Interestingly, at the end of July, the IMF warned the Central Bank of Kenya against the introduction of the state digital currency.