Retail central bank digital currencies (CBDCs), according to the managing director of the International Monetary Fund (IMF), will have a wide range of unpredictable consequences.
In an interview given on May 1 at the Milken Institute’s 2023 Global Conference, Kristalina Georgieva, an economist at the IMF, advised caution when it came to retail CBDCs.
Georgieva explained the IMF considers retail CBDCs to have far more room for error than wholesale CBDCs.
We think that wholesale CBDCs can be put in place with fairly little space for undesirable surprises, whereas retail CBDCs completely transform the financial system in a way that we don’t quite know what consequences it could bring
The IMF is collaborating with about 50 countries to ensure best practices are adopted, Georgieva said, which she expects to have a huge influence on the banks and economies in the future.
According to Georgieva, “the future” of CBDCs has already arrived because “even” the United States is now involved in CBDC development:
Even in the U.S. where that was for quite some time a topic of not great interest, now there is engagement, and for the right reason. The future has arrived.
On April 12, the IMF made the announcement that it would produce a CBDC guidebook to help central banks in the design and implementation of CBDCs. The United Nations’ financial agency claimed that “unprecedented” amounts of interest from countries around the world led to the decision.