Daily Management Review

Issuing Digital Currency Needs to Be Considered By Central Banks: IMF Chief


11/15/2018




Issuing Digital Currency Needs to Be Considered By Central Banks: IMF Chief
The possibilities of issuing digital currency should be looked into by central banks, believes the chief of the International Monetary Fund Christine Lagarde arguing that this would increasing the safety of digital currency transactions
 
“That currency could satisfy public policy goals, such as financial inclusion, and security and consumer protection; and to provide what the private sector cannot: privacy in payments,” Lagarde asserted in a speech delivered at the Singapore Fintech Festival.
 
In any case central banks are facing a challenge of managing transactions because of the rise of non-cash transactions throughout the world. Concerns over digital currencies have been raised by regulators and have demanded greater oversight and control.
 
"I believe we should consider the possibility to issue digital currency," Lagarde said "There may be a role for the state to supply money to the digital economy. The advantage is clear. Your payment would be immediate, safe, cheap and potentially semi-anonymous... And central banks would retain a sure footing in payments."
 
Expanding the explaining the advantages for central banks to do so, she said there can be an enhancement in financial stability by central bank digital currencies because such a step would bring down the risk of bank runs. She said that when people start to believe that bank withdrawals are honoured on a first-come-first-serve basis with respect of cash, people make runs on banks.
 
“Digital currency, instead, because it can be distributed much more easily than cash, could reassure even the person left lying on the couch!” Lagarde argued.
 
There is an expectation among people to money being integrated with the social media in the current fintech revolution, said the IMF chief because they believe that money can be made readily available online and through person-to-person usage  - including for micro-payments and they would be cheap and safe. Further such transactions would also be protected against criminals and prying eyes.
 
The possible threats and risks to financial integrity and financial stability can be mitigated by the wide canvas of technology, she said while refuting opposition to the issuing of digital currencies by central banks.
 
The most appropriate method to encourage innovation of digital currency issued by central banks is the use of public-private partnership, she said.
 
“The central bank focuses on its comparative advantage back-end settlement—and financial institutions and start-ups are free to focus on what they do best—client interface and innovation. This is public-private partnership at its best,” said Lagarde.
 
Lagarde further argued that it was also possible to usher in and enhance financial inclusion in remote and marginalized areas and societies of the world through the central bank digital currency. “We know that banks are not exactly rushing to serve poor and rural populations,” she said pointedly.
 
Serious consideration about proposal of about digital currencies is already being given by central banks in Canada, China, Sweden and Uruguaym Lagarde said.
 
(Source:www.forbes.com)






Science & Technology

Nestle's Head: Veggie meat is new megatrend

Huawei may introduce Android replacement in August

Are US high-tech investors causing brain drain in Europe?

'Russia's Google' Yandex Was Hacked By Western Intelligence For Spying: Reuters

Reuters: Chinese hackers were stealing data from IT giants for years

China's first solar power molten salt plant sets record

WSJ announces imminent start of Boeing 737 MAX flight tests

Study: Machine learning is five times more harmful for the environment than a car

Would Singapore Be The First One To Bring Lab Grown Shrimps To The Global Market?

Apple Patents A ‘Foldable Screen’ For Creating Foldable iPhones

World Politics

World & Politics

France announces new tax for air fares

Europe Concerned Over Iran Move To Breach Uranium Enrichment Cap

Singapore To Build ‘$296 Million’ Smart Next-Gen Army Training Centre

No More Sales Of E-Cigarettes In San Francisco?

US ‘Hell-Bent On Hostile Acts’ Even After Trump-Kim Agreement, Says North Korea

Italy avoids EU sanctions for high national debt

Trump allocates 4.6 bln to help migrants

Iran Says Trump’s Belief That US-Iran War Would Be Short Is “An Illusion”