Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva on Wednesday, November 15, said that central bank digital currency (CBDC) can replace cash, separately noting that it will take time to implement the corresponding scenario.

During a speech at the Singapore Fintech Festival, Kristalina Georgieva said that cash distribution in island economies is expensive. In her opinion, digital money issued by state financial regulators will help to increase the level of sustainability in countries with more developed economies. She also said that CBDC can improve access to financial services in those regions where a small part of the population has bank accounts.

The head of the IMF says that this currency, which can be conditionally designated as money of the high-tech era, could offer a safe and inexpensive alternative to cash. Also, according to her, CBDC can potentially build a bridge between private finances and criteria for measuring their value.

According to information held by the IMF, more than 100 countries are currently exploring the possibility of introducing a digital currency issued by financial regulators. This figure is approximately 60% of the states of the world. The IMF’s September report indicates that the current level of global interest in CBDC is unprecedented. The central banks of some countries have launched pilot projects for this currency. Also, CBDC has already been released in some states.

According to the results of a survey of state financial regulators of the world conducted by the Bank for International Settlements, it was found that out of 86 relevant organizations, 93% are studying the prospects for the introduction of digital currency. Also, 53% of central banks announced their intention to issue CBDC in the medium or short term.

Data from the Atlantic Council indicate that as of June of the current year, only 11 countries have introduced the currency of this category. In 53 states, the implementation of relevant projects is at an advanced planning stage. In another 46 countries, this topic is being studied.

Kristalina Georgieva stated that the public sector should continue to prepare for the introduction of CBDC and the launch of payment platforms related to this currency. She noted that many countries are currently studying a new generation of money and are working on creating regulations that will guide the development of digital finances. At the same time, the head of the IMF said that there are a lot of opportunities for innovations in this sphere. Also, she stated that there is currently a lot of uncertainty about CBDC use cases.

The countries that have released retail CBDCs are the Bahamas, Jamaica, and Nigeria. The Monetary Authority of Singapore thinks that cash is conceptually incompatible with the digital economy. The report of the central bank of this country for 2021 indicated that the demand for cash as a means of payment will decrease.

The Bank for International Settlements claims that using CBDC for cross-border payment transactions will reduce the costs associated with receiving, storing, and spending foreign currency.

Kristalina Georgieva also stated during her speech in Singapore that artificial intelligence could enhance some of the advantages of a new-generation currency. According to her, advanced technology can improve the accuracy of credit ratings and personalize consumer support.

As we have reported earlier, Mastercard Reports on Wrapped CBDC Solution Success.