According to reports, the IMF (International Monetary Fund) has given an interesting prediction on cryptocurrencies. According to the institution, global central banks will reportedly issue digital assets at some point in the future. This comes at a time when some world banks have begun to show interest in crypto and adopted the technology.
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How IMF Came Up With its Prediction For Central Banks Around the Globe
Per the report, the IMF has released a report that details a fintech survey. The survey found that central banks have begun to trend towards the part of digital currencies. The survey reportedly covered 96 financial institutions all across the member countries of the International Monetary Fund.
While the organization has said it received a number of wide-ranging views regarding the future of crypto, there was also a clear belief that the central banks across the globe will move away from fiat at some point in the future and stick to crypto.
According to the report:
“About 20% of the respondents from the survey say they are now exploring the possibility of giving virtual currencies.”
The report also adds that most of the work done by central banks to create digital currencies remain in the early stages. However, the organization pointed out that only four of the respondents from the survey claim to be in a pilot initiative. Uruguay was among the four featured in this category. With several other countries, like China, Sweden and Ukraine stating that “they are on the verge” of initiating tests for digital currency usage.
Many Respondents Believe Digital Currencies Offer More Efficiency
Regarding the reason for cryptocurrency adoption, the respondents highlighted that the technology offers cost-savings and better efficiency.
The primary reasons that were cited in favor of Central Banks issuing digital currencies relate to lowering costs and increasing the efficiency of monetary policy implementation. Other reasons include countering competition between cryptocurrencies, and implementation of the contestability of payment markets, as well as offering a risk-free payment model to members of the public.
The dwindling interest in fiat or regular currency has been a stepping stone for central banks in the developed countries to pursue crypto. With physical fiat becoming less common when it comes to payment options, digital currencies typically make sense in a widely online-driven marketplace.
There’s more. The IMF report also discovered that there is a lack of uniformity within Europe’s approach towards fintech adoption. This is surprising considering the fact that the continent has a high number of mobile phone users with internet access. The UK was singled out for being well ahead of the rest of Europe in terms of fintech/crypto innovation and investment.
There’s Are Still Concerns About Cyber Risks Respondents Say
While the world central banks might be considering adopting digital currencies, the issue of cybersecurity and data protection remain overwhelming concerns among users around the globe. 79% of the respondents identified cyber risks as a major problem that is affecting the finance sector.
Bitcoin and altcoins have been viewed as antithetical to the issue of financial security by the global economic powers historically. However, central banks deciding to adopt digital currencies is a statement. It shows that these banks can ahead with issuing digital tokens.