IMF presents plan for cross-border CBDCs.

An official from the International Monetary Fund said on Monday that new platforms for cross-border central bank digital currencies (CBDCs) could be more efficient and safe, while still allowing countries to impose compliance checks and capital controls. Tobias Adrian, director of the IMF’s monetary and capital markets department, believes that one global CBDC platform that allows for capital controls could cut payment costs. However, this vision is very different from the decentralized financial systems that crypto enthusiasts dream of.

Adrian stated in a speech given in Rabat, Morocco, that “Our blueprint for a new class of platforms would enhance and ensure greater interoperability, efficiency, and safety in cross-border payments, as well as in domestic financial markets. The cost, sluggishness, and opacity of cross-border payments comes from limited infrastructure.”

The IMF is “working hard” on a global infrastructure to enable different CBDCs to work with each other, according to Managing Director Kristalina Georgieva. The new system, outlined in an IMF Fintech Note published on Monday, could program payments without payees giving precious private information to intermediaries, and it could save liquidity by letting contracts be pledged as collateral – without changing the fully fungible nature of money, Adrian said. Adrian first proposed the idea of a CBDC platform in September.

Adrian added that the ledger would be controlled by the platform operator, apparently rejecting more innovative ideas such as blockchain-based validation. Governments would keep the right to limit their citizens’ transactions in foreign currency and impose anti-money laundering checks, Adrian said – with the IMF keen not to undermine the kinds of capital measures often imposed on countries facing a financial crisis.

The Bank for International Settlements and private players such as SWIFT are both looking at options involving state-backed CBDCs, as there is plenty of competition against free-floating blockchain solutions being used for cross-border payments. The Committee on Payments and Market Infrastructures, a standard-setter linked to the Bank for International Settlements, is looking at the impact of stablecoins – tokens tied to the value of a fiat currency – while a report from the European Central Bank last year poured cold water on the idea that crypto can cut international payment costs.

Read more: New Global CBDC Platform Could Cut Payment Costs, IMF Says

Edited by Sandali Handagama.

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