As per the statement given by the International Monetary Fund’s Managing Director, Kristalina Georgieva, technological progression can aid in making the payments easier, swifter, economical as well as the benefits may tend to become a lot vulnerable.
She further added that the “Progression created due to digital shift can aid in restructuring the cross-border payments and remittances.”
Ms Georgieva stated at a virtual workshop on how digital money can smoothen out the process of remittances, Discrepancies in access to vaccines, in recoveries from the pandemic and admission to a digital future are hurdles the globe must address.
Ms Georgieva stated out that: “We need to use every tool we can to support those most affected by the pandemic. And with the risk of a growing digital divide between rich and poor countries, we must also ensure that all countries can benefit from the latest innovations in digital money and payments, particularly remittances.”
She stated that: “Remittances have played a core role in cultivating the lives of people in developing economies and supporting economic activity, and can take a huge advantage from the “revolution” in digital money.”
The IMF chief stated out that: “The major beneficiaries of adopting digital currencies in allowances would be susceptible individuals sending small value amounts.”
The IMF chief’s comments came on the same day as Coinbase’s unveiling on Wall Street on Wednesday, with the digital currency exchange’s stock opening at $381, offering it a market value of $100 billion. The business’s listing on a public stock exchange is witnessed by some as a crisis event for digital currencies.
Ms Georgieva stated out that: “Last October, The Bahamas launched the Sand Dollar, the world’s first central bank digital currency. Many other economies are exploring their pilot programmes. New forms of digital money could provide a parallel boost to the vital lifelines that remittances provide to the poor and to developing economies.”
She further also added out that the digitalized finance and as well as its other forms have now almost become a norm, such as secretly issued stable coins, are gradually being used for cross-border payments.
The right frameworks are essential for peer-to-peer transfers of central bank digital currencies or privately-issued stable coins, which “could lead to shorter payment chains, faster transactions and more competition among remittance providers”, she added.
“First, new forms of money must remain trustworthy. They must protect clients, be safe and anchored in sound legal frameworks, and support financial integrity,” she said.
Ms Georgieva stated out that, “New forms of digital money could provide a parallel boost to the vital lifelines that remittances provide to the poor and to developing economies.”
“Second, domestic economic and financial stability must be protected by carefully designed public-private partnerships that underpin the provision of digital money, including fair competition. Third, frameworks should be geared toward ensuring the international monetary system remains stable and efficient.”
The risk of a “mounting digital divide” demands that all nations can benefit from the latest innovations in digital money and payments, Ms Georgieva said.
“With our mandate to safeguard monetary and financial stability, the IMF has an important role to play in supporting our members to deliver on these priorities, and we are ramping up our capacity,” she stated.
The IMF will continue close collaboration with key stakeholders – including the Financial Stability Board, the Bank for International Settlements, the World Bank and industry players, Ms Georgieva added.