Digital Currencies Backed by Central Banks Could Become Reality, IMF and World Bank Reports.

Five interesting and new trends in the Fintech space is the fact that central-backed digital currencies could become a reality in the near future as the new survey by the IMF and World bank reveals

According to the report: “Work is in early stages but only four pilots were reported, meanwhile around 20 percent of the respondents said that they exploring the possibility for such currencies to be issued.”

 

The low costs, contestability of the payment market, increasing efficiency of monetary policy implementation, countering competition from cryptocurrencies, making sure that there is a risk-free payment instrument offered to the public are the main reasons indicated in favour for the reason behind issuance of digital currencies.”

The IMF white paper released partly reads:
“ The Fintech issues are not properly addressed by their existing legal frameworks as almost two-thirds of the country who responded to the survey identified these gaps. The legal framework for financial sector related to crypto-assets, peer-to-peer lending, mobile money, robo-advisory services, algorithmic/automated trading, and lending activities using AI and ML are particularly in this case.”

According to responses from the survey which also opted for the need to revise or develop international standards, stated the following:

• 68% – Respondents who cited that there is a need for international standards for crypto-assets.
• 38% – Authorities that highlighted that crypto-assets has the largest data gaps in cross-border activities.
• 34% – Respondents that suggested that mobile money payment services is necessary to meet international standards
• 29% – Respondents that suggested a need for international standards in P2P lending.

Notably, most jurisdictions agree that crypto-assets present risks to investors but interesting to see that they are not yet a threat to financial stability.

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Credit : C. David

 

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