In the future, central banks worldwide are predicted to issue digital currencies to emerge national economies, reported by The International Monetary Fund (IMF).
Earlier, IMF and World Bank have spread a fintech survey to multiple financial institutions within all member countries and received 96 responses. IMF has consolidated the answers to bring out a full report which contains an interesting point of view of the future of cryptocurrency.
According to the report, in different countries, several central banks are considering issuing Central Bank Digital Currency (CBDC) such as in Uruguay, Bahamas, China, etc.
Specifically, central banks in Bahamas, China, Eastern Caribbean Currency Union, Swedenand Ukraine are “on the verge” of testing their systems. In Uruguay, the pilot program has already been launched.
While some central banks have made progress in developing CBDC systems, others are in the researching phase. Some critical fields that being considered are the structure of the banking sector, entry of nonbank financial institutions, monetary policy transmission and last but not least, the impact on financial stability.
Both CBDC options are being considered by both emerging economies as well as developed economies. While emerging economies consider CBDC as a method to reduce banking costs and get banking services closer to all citizens, developed economies strive to provide an alternative to cash as its frequency of use dwindles.
Earlier, IMF and World Bank have reportedly launched private quasi-cryptocurrency to gain insights into blockchain and cryptocurrencies as well as their applications. The main purpose of the project is to provide a comprehensive understanding of technology for both financial institutions.