The International Monetary Fund (IMF) and the World Bank, together with the Bank for International Settlements (BIS) have issued a statement, linking the establishment of a central bank digital currency (CBDC) as a solution to the reliance on expensive money transfer services.
The statement was made in a report for the G20 summit in Italy, involving the presence of finance ministers and central banks from major world countries.
Vice President for Growth, Finance and Institutions for the World Bank Group, Indermit Gill believes the introduction of the CBDC will greatly benefit communities, businesses and economies around the world as a fast, cheap, transparent, and more inclusive cross -border payment service
Even the deputy governor for financial stability of the Bank of England, Sir Jon Cunliffe thinks CBDC technology can sustain the payment system.
However, there are risks in the establishment of CBDC, especially for emerging markets and countries. This issue requires high attention to curb criminal activities such as theft of money or confidential information of CBDC owners, including network hacking.
Therefore, the decision on the establishment of the CBDC will be entirely up to the country in considering its benefits and disadvantages.
Even if countries agree to develop the CBDC, the technology has the potential to improve the efficiency of cross-border payments, provided its design follows the Hippocratic Oath principle: ‘do no harm’.
Meanwhile in June, the chairman of the United States Federal Reserve (US), Jerome Powell had a meeting with the CEO of Coinbase and the Digital Dollar Project. Perhaps, the meeting has something to do with the introduction of two digital dollar prototypes expected this month.
