Reportedly, world governments see central bank digital currencies (CBDCs) as a way to improve the existing fiat ecosystem. Cryptocurrency’s technical background, with support from the central bank, can be the way to enable a rich monetary system, as suggested by an International Monetary Fund (IMF) publication, as reported by Cointelegraph.
“Digital technologies promise a bright future for the monetary system,” reads the publication, attributed to Agustín Carstens, deputy managing director, IMF, and Jon Frost and Hyun Song Shin, executives, BIS.
Concerns around cryptocurrencies that prevent them from mainstream adoption, as stated by the BIS executives, have been in congestion with decentralized finance (DeFi) and the trust in volatile assets.
Private Sector Can Use New Technology To Foster Monetary EcoSystem
“By embracing the trust provided by central bank money, the private sector can adopt the new technologies to foster a monetary ecosystem,” the post emphasized, with the point that both wholesale and retail CBDCs have the potential to inherit traits from the cryptocurrency ecosystem to benefit end users.
Moreover, Cointelegraph noted that the post further recommended that central banks should utilize innovations such as tokenization to allow purchases through multiple fiat currencies, to further benefit merchants and customers.
Previously, the publication reported that Bitcoin (BTC) markets have the potential to recover from the uncertainty around the economy and geopolitical tensions. However, the IMF pointed out that liquidations, bankruptcies, and losses at firms such as Celsius, Three Arrows Capital, and Voyager Digital Holdings had an impact on traditional financial systems and the effect from the impact of it.
