The International Monetary Fund (IMF) is working on a worldwide central bank digital currency (CBDC) infrastructure.
That platform would allow for interoperability of CBDC settlements and avoid their underutilization, IMF Managing Director Kristalina Georgieva said during a conference in Rabat, Morocco.
“We are working on a principle of interoperability,” said Georgieva, whose comments were reported Monday (June 19) by Bloomberg News.
This concept would employ a shared infrastructure that would avoid so-called “settlement blocks,” the “last thing we want,” Georgieva added.
She noted that there are 10 central banks that are “already crossing the finish line” on issuing a national digital currency, but said there is “a lot that is still not decided” when it comes to CBDC organization and regulations.
“We will pursue relentlessly together” the development of national digital currencies, Georgieva told conference-goers.
Her comments come as a number of organizations explore the potential of CBDC. For example, as PYMNTS wrote last month, the central banks of more than 100 countries are exploring what their own CBDC might look like. And each of the G7 economies has moved from the research stage of a CBDC to the development phase or has begun running concrete pilots.
The Bank of International Settlements and a working group of central banks believe that the introduction of a CBDC in their respective jurisdictions could offer an innovative opportunity for the monetary system, and that the launch of a retail CBDC in particular, compared to a wholesale vehicle, could “rest primarily” on the future role of central bank issued money as a “public good.”
But to get past development or piloting digital payment vehicles, the participating banks admit the need to invest more in design decisions as they relate to technology, end user preferences and business models, within a final-decision-agnostic testing environment.
“That’s because, ultimately, CBDC issuance and design are sovereign decisions for relevant authorities based on their assessments coming out of the contemporary testing process, taken together with each individual jurisdiction’s own circumstances,” PYMNTS wrote.
That report also noted that the reality of a retail CBDC is a near-future innovation, not something that will be rolled out in the immediate future.