The International Monetary Fund (IMF) has cautioned that while Central Bank Digital Currencies (CBDCs) hold the potential for enhanced payment systems efficiency and financial inclusion, there exists a looming risk and potential complications if these technologies are not meticulously designed and subject to appropriate regulations.
This warning underscores the IMF’s recognition of both the benefits and the necessity for careful governance to avert potential threats associated with the implementation of CBDCs.
The cautionary message from the Fund is rooted in the research discoveries of three prominent researchers affiliated with the organization: Tobias Adrian, Dong He, and Tommaso Mancini-Griffoli.
“Benefits are more likely to come in time, following the policies pursued by countries and the private sector’s response, as well as the evolution of technology. In most cases, it would be useful for countries to continue exploring CBDC, carefully and systematically, as IMF Managing Director Kristalina Georgieva noted in her recent speech at the Singapore Fintech Festival,” they said in a publication on the IMF Blog.
In Ghana, Dr Ernest Addison, the Governor of the Bank of Ghana (BoG) is of the view that, year in year out new financial technologies are developed with the promise of revolutionizing the financial sector, and although most of thses technology may come with their own threats, it is a force for good and a key determinant of the development trajectory.
He said, “Therefore, our ability to appreciate, adopt, and adapt to technology will help position the financial services industry to drive national development efforts.”
He added that for a while now, the BoG has created an enabling environment for the digital delivery of financial services.
“Currently, the financial sector can boast of a variety of digital financial services, including payment, credit, savings, and investment products that are offered by banks and FinTechs. New business models have emerged through FinTech channels and removed barriers to micro-credit as well as paved the way for affordable and convenient inward remittance services.
“These interventions have fostered financial inclusion in the country, evidenced by the phenomenal improvement in financial access from 41% in 2014 to 68% in 2021, according to the Global Findex Report of the World Bank,” Dr Addison said.