IMF Still Working On Potential CBDCs
November 26 2018 - 1:04PM
ADVFN Crypto NewsWire
Bitcoin Global News (BGN)
November 26, 2018 -- ADVFN Crypto NewsWire -- Singapore is often a
central spot for cryptocurrency related conventions and to found
related businesses. The government of Singapore has continually
shown a progressive stance on the technology to reap the financial,
cultural and educational benefits. The annual Fintech Festival took
place last week in Singapore where the International Monetary Fund
was represented by Managing Director Christine Lagarde
Still Seeing
Problems
In congruence with the most recent
report on cryptocurrencies released by the IMF, Christine Lagarde
focused on the problems with cryptocurrencies, rather than on the
work being done to overcome the obstacles. Their primary concern is
the potential of a Central Bank issued digital currency (CBDC).
This type of financial instrument would become the closest thing to
a legitimized global currency. Bitcoin and any other public, P2P
cryptocurrencies are already functioning as global currencies, but
without official government recognition.
The primary reason cited that this
could never happen on a major scale is,“for political reasons,” she
said. They see this as a direct liability against a central bank.
However, they do still note that a CBDC seems like the eventual
next step in the evolution of human currency.
“Although the technology [DLT] is
evolving, it currently falls short in scalability, energy
efficiency, and payment finality. DLT could be used over a closed
(“permissioned”) network managed by the central bank. But there are
other types of centralized settlement technology that may prove
more efficient.”
And in an extremely positive light
for cryptocurrencies, the related illicit activies of money
laundering and illegal substance purchases were not covered. But
rather, more focus was placed on another widely considered issue -
volatility of cryptocurrencies where the issue directly affects our
ability to considering them a “currency” in the traditional
sense:
“[Cryptocurrencies] struggle to
fully satisfy the functions of money, in part because of erratic
valuations.” In a footnote, the report said that as for
stablecoins, there are “doubts about the ability to maintain a peg,
short of full backing by fiat currency.” - Christine
Lagarde
By: BGN Editorial Staff
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