IMF says it will play a ‘key role’ in the shift to a world of digital money

The International Monetary Fund (IMF) must bolster its resources to “track, provide recommendations and help manage the complex and potentially far-reaching transition” to digital money. This is laid out in the institution’s program document.

The IMF noted that digital money could make payments more accessible, faster and cheaper.

“But, to reap all the benefits and manage the risks, policymakers must step up and view this transformation in perspective, as the consequences are broad and deep.”

According to fund experts, the policy bodies and regulators in the transformation process face three main tasks:

• ensure the reliability of the new form of money and protect consumers;
• preserve domestic economic and financial stability through a “carefully designed public-private partnership” for providing digital money;
• not undermine the stability of the international monetary system.

“The Fund is set to play a key role in helping its members harness the benefits of digital money and manage the risks,” the institution noted.

The IMF stressed that it has the capabilities, skills and mandate for this. But the Fund should quickly scale up the resources allocated to this direction and broaden coordination with other institutions, according to experts at the organisation.

They analysed in the document the differences between CBDC, stablecoins, electronic money and crypto assets, including Bitcoin:

“Although various types of digital money are being considered, this document does not specify which form could prevail.”

Earlier, IMF Deputy Director for Monetary Policy and Capital Markets Tobias Adrian and IMF General Counsel Roda Wicks-Brown stated that any attempt to use crypto assets as national currencies would be risky.

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Back in June 2021, the Salvadoran authorities passed a recognize Bitcoin as legal tender in the country. The IMF warned that this could lead to a number of risks and regulatory problems.

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