IMF Managing Director hints at a new central bank cryptocurrency

IMF Managing Director Christine Lagarde sees a future in which money is “more convenient and user-friendly”

In a speech made at the recent Singapore Fintech Festival, Christine Lagarde, Managing Director of the International Monetary Fund (IMF) suggested that a new bank-issued digital currency could be on its way.

The speech observed how changes in online information structures are reinventing the way we handle our funds, and foresees a future in which money is “more convenient and user-friendly, perhaps even less serious-looking.”

Lagarde also expects digital currency to become more integrated with social media, and available for online and one-to-one use and “protected against criminals and prying eyes”.

A central bank digital currency could satisfy several public policy goals according to Lagarde, including financial inclusion for businesses in “remote and marginalized regions”, security and consumer protection, and private payments.

The IMF also published a new paper discussing the domestic advantages and disadvantages a digital currency could pose for users and central banks. On the whole, it’s pretty supportive, though the stance on decentralised technologies such as distributed ledgers is a bit less certain:

“Decentralized settlement is possible via the use of distributed ledger technology (DLT). However, although the technology is evolving, it currently falls short in scalability, energy efficiency, and payment finality.”

The note goes on to state that DLT could be used over a ‘permissioned’ network run by the central bank, though other centralised technologies “may prove more efficient.”

Several central banks are already in the process of creating their own digital currencies, such as Japan’s  J-Coin and Sweden’s e-krona. Azerbaijan won’t be adding itself to the list any time soon though, reports have said.

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