IMF Favours Launch of More CBDCs in Coming Years, Says Bitcoin Is Not Money

UTC by Bhushan Akolkar · 2 min read
IMF Favours Launch of More CBDCs in Coming Years, Says Bitcoin Is Not Money
Photo: World Economic Forum / Flickr

IMF executives see CBDCs setting up a strong system of global financial payments in the next three-to-five years. IMF chief recommends not shunning the entire crypto space because of Terra’s collapse.

Speaking at the ongoing World Economic Forum on Monday, May 23, IMF chief Kristalina Georgieva spoke about the current state of the crypto market. In her push for central bank digital currencies (CBDCs), the IMF chief said that in the next five years CBDCs “would be quite present in the world.”

IMF Stance on CBDCs

The Governor of the Bank of France François Villeroy de Galhau also extended his views on CBDCs. Villeroy de Galhau sees a strong CBDC in the market in the next three years. He further added that CBDCs will become “a superior system” and be used on a daily basis.

“We have several experiments which are not very far from that. They are not yet generalized but they could be, let’s say in the next three years,” he replied. “It will go quicker on the wholesale side I guess because it raises less sensitive questions.”

The IMF panel also acknowledged some of the existing projects such as China’s Digital Yuan, Nigeria’s eNaira, and Bahamas Sand Dollar.

IMF chief Kristalina Georgieva also touched down about Bitcoin. She said that just because something has the term ‘coin’ doesn’t mean it’s money. She said that anything not backed by a sovereign guarantee could be an asset class but not a currency.

IMF Chief on Terra Collapse

IMF chief Kristalina Georgieva also spoke about the recent collapse of the TerraUSD stablecoin earlier this month. Speaking on the collapse of the Terra Network, Georgieva said:

“When somebody promises you 20% returns on something that is not backed by any assets, how would we call normally call this thing? We would call it a pyramid.”

However, she added that there are some stablecoins that truly deserve that status. “Some of them deserve the name because they’re backed by assets. And when they’re backed by assets one two one they’re really stable,” she said.

Interestingly, the IMF chief is also against banning all of the cryptocurrencies because of the Terra collapse. Speaking at the WEF annual meeting at Davos, Georgieva said:

“I would beg you not to pull out of the importance of this world. It offers us all faster service, much lower costs, and more inclusion, but only if we separate apples from oranges and bananas”.

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