The digital world is witnessing another revolutionary shift. In an effort to improve the efficiency of cross-border payments, many economies are actively engaged in CBDC research. Innovation is paving the way forward!
According to IMF experts, two-thirds of countries in the Middle East and Central Asia are exploring adopting central bank cryptocurrencies. Bahrain, Georgia, Saudi Arabia, and the United Arab Emirates are actively exploring the potential of national digital assets. Kazakhstan is leading the way, with the launch of the digital tenge nearing completion.
According to analysts, the use of digital currencies will make cross-border payments more convenient. This view is echoed by IMF experts who argue that central bank digital currencies will enhance the efficiency of payment services and help financial services reach a wider audience. In addition, the implementation of a CBDC could reduce costs by eliminating the need for intermediary transactions and fostering competition in the payments market.
Adopting a CBDC in oil-exporting countries "tend to have frictions like varying data formats and operating rules across regions and complex compliance checks," the IMF said. "CBDCs that address these inefficiencies could significantly cut transaction costs," the organization added.
The IMF report emphasizes that choosing the appropriate functionality to implement CBDCs and building trust in financial institutions are key priorities for countries developing national digital assets.
However, introducing virtual assets is a long and complex process that requires careful consideration. Central banks need to weigh all the pros and cons, the IMF noted.
Earlier, the fund's analysts pointed out that residents of countries with restrictive financial regulations often turn to Bitcoin. They use the first cryptocurrency to make cross-border transactions more secure.