IMF competes with Ripple for CBDC platform
The IMF competes with Ripple and other companies in the CBDC platform space. The organization wants to curb the further spread of cryptocurrencies. In addition to technical advances, covered currencies should attract users.
IMF competes with Ripple for CBDC platform
The International Monetary Fund (IMF) is competing with Ripple in the CBDC platform space, as reported by Reuters . The aim of the digital offers is to set up a central contact point that makes it possible to settle different digital central bank currencies with each other.
Kristalina Georgieva stated yesterday Monday that the IMF is working on its own CBDC platform. The announcement was made at a conference of the international organization in front of African central banks in Morocco’s capital Rabat.
Various companies already provide similar products or are in the process of developing them. According to the IMF, 114 central banks around the world are currently working on their own CBDC. While some of these are already available in a full version, others are still in the research stage or in a testing phase.
XRP issuer Ripple is also among the developers of CBDC platforms. Ripple’s goal has always been to work with financial institutions. Customers also include central banks, as is becoming increasingly evident.
Ripple only released its own CBDC platform in May . This not only makes it possible to process Forex transactions, but also to create your own CBDC with ease. However, the Ripple currency XRP is not used.
Although the IMF has not yet presented any concrete plans, initial information suggests that the project is primarily aimed at making different currencies interoperable with one another.
“CBDCs should not be fragmented national offerings… For more efficient and fairer transactions, we need systems that connect countries: we need interoperability. That is why we at the IMF are working on the concept of a global CBDC platform” Georgieva explains.
She recommends that the world’s central banks agree on common guidelines that should include interoperability options, among other things.
IMF wants to fight crypto with CBDCs
Should central banks fail to reach a consensus, central banks would risk losing further ground to cryptocurrencies. So, the IMF wants to use CBDCs to fight the growing crypto market.
Because: Worldwide transactions are already possible with Bitcoin and Altcoins. in no time at all. In addition, the necessary fees are very low – in contrast to global payments in the classic financial system.
Georgieva sees the time to catch up. In this way, central banks should be able to avert an imminent loss of importance. The Bulgarian politician even wants to make CBDCs particularly attractive.
So these should be equipped with a money cover and can no longer be “reprinted” without a limit. In addition, thanks to interoperable digital central bank currencies, one wants to gain distance from the enormous fees that are incurred when using classic methods such as bank transfers.
“If countries are only developing CDBCs for domestic use, we are underutilizing their capacity.” Explains the politician.
According to Georgieva, users pay an average of 6.3 percent in fees for cross-border money transactions. This results in costs of 44 billion US dollars per year. CBDCs should address this weak point.
The combination of covered currencies with fast and inexpensive transactions should shift the development of the financial market back in favor of state currencies.
