The International Monetary Fund (IMF) has said central bank digital currencies (CBDCs) like eNaira are better than cryptocurrencies including Bitcoins and other altcoins.
Kristalina Georgieva, IMF managing director said in a statement, that CBDCs are gaining momentum after moving from theoretical to practical explorations.
According to the IMF boss, “In order to become familiar with the bits and bytes of digital money, central banks are getting to work.
“We don’t yet know how far and how fast CBDCs will go, since they are still in their infancy. As a result, central banks are building up their ability to harness new technologies – so that they will be ready for whatever lies ahead.”
“In contrast to private digital currencies, CBDCs can potentially offer greater resilience, more safety, greater availability, and lower costs when designed prudently.
“Crypto assets, which are inherently volatile, are not backed by any government. It is possible that even the best-managed and regulated stable coins cannot compete with a well-designed and stable central bank digital currency.”
Georgieva said global central banks are committed to minimizing the detrimental effects of CBDCs on financial intermediation and credit provision. That this is imperative for the economy to function properly. The CBDCs we studied are not interest-bearing, which makes them useful, but not as attractive as traditional bank deposits as a vehicle for savings.
The IMF in a recent paper examined several CBDC projects.
There are about 100 countries being supported by the IMF to explore CBDC.
