October 21, 2019 / 4:50 PM / Bukola Akinyele for Proshare WebTV / Header Image Credit: @IMFNews
From the just concluded 2019 IMF/World Bank annual conference in Washington D.C, the Managing Director of the International Monetary Fund Kristalina Georgieva gave updates on the developments around digital currencies.
At a press briefing, she said the IMF and the European Central Bank have been working closely to understudy the activities of digital currencies and the impact they will have on the global economy.
She believed that there are opportunities for deepening sustainable finance through digital currencies, which requires an effective framework to guide its activities.
The IMF MD also said that she was fully aware of the financial inclusion drive that the digital currencies can deepen globally, but made a strong case for addressing the concerns and risks.
Part of the risks includes the issues around the likely abuse of the currencies for illegal transactions, money laundering and sponsoring of vices like terrorism.
Also, Georgieva noted that the sovereignty of nations was of utmost importance in the expansion of digital currencies.
According to her there are prospects for expanding digital money, which must also take into consideration the need for monetary stability for Central Banks.
Global financial regulators have been cautious about the disruptive capacity of digital currencies and have been issuing statements of caution on the application or deployment in financial markets.
A major discussion point at the moment is the Facebook Libra, a permissioned blockchain digital currency, which the American social media giant plans to launch in 2020.
The Facebook Libra has come under scrutiny from the U.S Senate Committee on Banking as the prospects of deepening financial services are great, but the likely disruptions it will bring to a well-regulated financial market persists.
The G7 and G-20 Finance Ministers are opposed to the Libra and are advocating for stringent restrictions on the currency.