For many years, cryptocurrencies and digital currencies belonged in the fringes of the financial system. However, that has now changed. Considering the way in which Bitcoin went mainstream, and millions of people started investing in it, it is not really a surprise. When so many people invest in a class of assets, then it is perhaps time for the regulators to step in and work out how best to control the market. On top of that, many other cryptocurrencies have come into existence other than Bitcoin, and those currencies have also gathered a lot of backing from investors all over the world. In a nutshell, digital currencies have arrived, and they are here to stay.
In this regard, the International Monetary Fund has proven to be a keen supporter of digital currencies, and many of the institution’s executives have consistently spoken about the advantages of using digital currencies to open up more value in global finance. In a new development, the IMF has predicted that in the future, central banks are going to come up with their own digital currencies. As per the paper released by the IMF, some central banks are trying to establish something on the lines of a Central Bank Digital Currency (CBDC). It is also interesting to note that the IMF paper claims that there are some central banks who have conducted extensive research on the effect a CBDC is going to have on central banking and the global financial system.
In the paper that was published, the IMF concluded that Fintech is being adopted at a rapid rate in many countries. The paper stated,
The paper finds that while there are important regional and national differences, countries are broadly embracing the opportunities of Fintech to boost economic growth and inclusion while balancing risks to stability and integrity.
It is a significant development for Fintech and digital currencies, which have strived for regulatory approval ever since they were first established. Additionally, when an authority like the IMF brings out such a paper, then it is hard to dismiss it.