Christine Lagarde, Managing Director of the International Monetary Fund (IMF), said that digital currencies are likely to become more convenient to use. The information was released on November 14 by Statistimes. Moreover, Lagarde said that Banks are not worried about offering services to poor populations.
Lagarde Suggests Banks Should Experiment with CBDC
During a speech at the Singapore Fintech Festival on Wednesday, Nov. 14, Lagarde said that central bank digital currencies could help bring financial inclusivity, better security and consumer protection. At the same time, a Central Bank Digital Currency (CBDC) could also allay privacy concerns.
Some of the countries that are currently thinking about issuing a CBDC are China, Uruguay, Sweden, Norway and Canada, among others. This could also help governments satisfy public goals that private companies are less motivated to achieve.
She mentioned that banks are not motivated at all to include those unbanked or provide services and solutions to poorer or rural areas. The role in regulating money that the state had in the past changed since fintech started to enter the market and promote new solutions.
With the expansion of new technologies, digital currencies are becoming more convenient to use.
On the matter she commented:
“The fintech revolution questions… coins and commercial deposits, and it questions the role of the state in providing money. And of course, we expect it to be cheap and safe, protected against criminals and prying eyes.”
Mrs Lagarde explained that central banks are able to design digital currencies with different features. For example, it would be possible to authenticate users’ identities by customers adhering to due diligence procedures. She has also said that it is possible for governments to work side by side with private fintech companies in order to improve the whole industry.
“Banks and other financial firms, including start-ups, could manage the digital currency,” Lagarde mentioned. “This is public-private partnership at its best”
As mentioned before, there are some banks all over the world that are analysing the possibility to issue Central Bank Digital Currencies. One of these banks is Sweden’s Central Bank. Riksbank is trying to adapt to these changing times with a CBDC.
The bank explained that there are some social groups that are not able to be included in the new financial revolution. These include older individuals and poorer families. In this case, the state would be working to integrate thee groups and take responsibility for them.
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