The IMF works on a digital currency platform for central banks

“For this reason, we at the IMF are working on the concept of a global CBDC platform,” he added.

The IMF wants central banks to agree on a common regulatory framework for digital currencies that allows for global interoperability. Failure to agree on a common platform would create a void that cryptocurrencies were likely to fill, he said.

A CBDC is a digital currency controlled by the central bank, while cryptocurrencies are almost always decentralized.

There are already 114 central banks that are in some phase of exploring CBDCs, “with about 10 having already crossed the finish line,” he said.

“If countries develop CBDCs only for domestic deployment, we are underusing their capacity,” he added.

CBDCs could also help promote financial inclusion and make remittances cheaper, he said, noting that the average cost of money transfers stands at 6.3%, or $44 billion annually.

Georgieva stressed that CBDCs must be asset-backed, adding that cryptocurrencies are an investment opportunity when they are asset-backed, but when they are not they are a “speculative investment.”