The Head of IMF, Kristalina Georgieva, said she approves the use of CBDCs as a digital currency, but does not see Bitcoin or other crypto assets in the same way.
While speaking at an event hosted by Italy’s Bocconi University, Georgieva thinks that it will be very difficult to think of Bitcoin and other crypto assets as money due to some underlying issues with such currencies.
She argued that “De-facto assets” like Bitcoin do not have assets that back them. As a result, such assets are not stable and can rise and fall sharply. “In the history of money, it is difficult to think of them as money,” she added.
More Countries Now Involved In CBDC Research
She added that Europe needs to avoid the issues faced by Greece after the global financial crisis of 2007-2008. Georgieva pointed out that countries need to have a proper plan on how to provide medium-term fiscal consolidation to solve the present pandemic-related problem.
Georgieva admitted that about 110 IMF member countries are researching the viability of the central bank digital currencies (CBDCs). However, a major issue is how to provide interoperability of digital assets.
She also advised that policymakers need to assess and carry out proper research on the CBDCs to see whether they can be taken as an effective means of exchange for the public.
IMF Shows More Interests In CBDCs
The IMF has shown interest in blockchain, the technology behind Bitcoin, and other crypto-assets. While it supports CBDCs to an extent, it doesn’t seem keen on the future of cryptocurrencies.
In 2019, the IMF partnered with the World Bank to roll out “Learning Coin”, a ‘quasi-cryptocurrency’ with a private blockchain.
According to the IMF, the coin was designed as a tool for the World Bank and the IMF to understand the technology. Additionally, the project will offer an application where the users can store blog articles, presentations, videos, and research for future purposes.
The IMF also noted that holders of the token can redeem the token to get real-life rewards. It shows that the IMF is very serious about blockchain technology and may have more projects in the future.