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News- Privacy concerns about China’s digital yuan, which Georgieva highlighted as one of six central banks on the border of CBDC development in her speech, were not addressed.
- For starters, CBDCs aren’t a one-size-fits-all solution. Because each economy is different, Georgieva said delegates, CBDCs will play a different function in each country. Georgieva argued that CBDCs might aid with financial inclusion in less economically developed countries, and that they could also serve as a backup payment mechanism in others.
- Georgieva urged central banks to strike a balance between CBDC design and policy, to pursue public-private collaborations to improve CBDC characteristics, and to maintain financial stability.
Private cryptocurrencies and stablecoins, according to Kristalina Georgieva, managing director of the International Monetary Fund (IMF), may not be as useful as well-designed central bank digital currencies (CBDCs)
Approximately 100 Countries Now Researching, Testing, or Distributing CBDCs
Georgieva stated that CBDCs might possibly offer more resilience, more safety, better availability, and lower prices than stablecoins and unbacked crypto assets that are fundamentally volatile in a lecture delivered at an event hosted by the Atlantic Council, an American think tank. As Georgieva mentioned, there has been a worldwide surge in interest in CBDCs, with approximately 100 countries now researching, testing, or distributing CBDCs. The IMF has been seriously involved in CBDC research, according to Georgieva, and has provided technical help to numerous member countries as they work to build their own CBDCs.
The IMF has learned three lessons from its involvement in CBDC development around the world, according to Georgieva. For starters, CBDCs aren’t a one-size-fits-all solution. Because each economy is different, Georgieva said delegates, CBDCs will play a different function in each country. Georgieva argued that CBDCs might aid with financial inclusion in less economically developed countries, and that they could also serve as a backup payment mechanism in others.
Second, Georgieva informed the audience that the IMF considers privacy and financial stability to be crucial in CBDC design. She emphasised the advantages of non-interest bearing CBDCs in preventing a reduction in traditional bank use, as well as the value of putting restrictions on CBDC holdings to avoid unexpected inflows of bank deposits into CBDC. Privacy concerns are a possible deal breaker in many nations when it comes to CBDC legislation and adoption, Georgieva continued. As a result, officials must strike the correct balance.
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Privacy Concerns About China’s Digital Yuan
Privacy concerns about China’s digital yuan, which Georgieva highlighted as one of six central banks on the border of CBDC development in her speech, were not addressed. Finally, Georgieva urged central banks to strike a balance between CBDC design and policy, to pursue public-private collaborations to improve CBDC characteristics, and to maintain financial stability.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
