On Friday, the International Monetary Fund (IMF) and the World Bank argued for the cross-border benefits of central bank-issued digital currencies (CBDC), claiming that projects like the United States’ digital dollar would aid global development.
Together with the Bank for International Settlements (BIS), the two global organisations released a paper saying that coordination on digital currencies will upend the status quo of needing to rely on expensive and delayed money transfer services to transport money throughout the world.
“Faster, cheaper, more transparent and more inclusive cross-border payment services would deliver benefits for citizens, businesses, and economies worldwide,” said Indermit Gill, World Bank Group vice president of equitable growth, finance and institutions.
The technology allows the Bank of England’s deputy governor for financial stability, Sir Jon Cunliffe, to “start with a ‘clean slate’” when it comes to strengthening the payments system, he added.
The paper was developed for a G20 summit in Italy, which brought together finance ministers and central bankers from the world’s top nations.
The paper envisions a central bank digital currency environment in which currencies can be quickly and at any moment exchanged. Digital currencies could provide the same services to retail customers that central banks provide swap lines to one another (to ensure, for example, that U.S. dollars are easily accessible for exchange).