According to the International Monetary Fund (IMF), a central bank digital currency (CBDC) accepted all over the world might be the way to go. The IMF believes that issuing a universally-valid CBDC could very easily change the current system of global payments and the world’s entire financial system at large.
In a recently released publication, the IMF believes that there could be significant benefits for individual users and also for governments. The IMF says that a universal CBDC would be simultaneously pegged to multiple CBDCs.
“Recently, the idea of a universal CBDC has also gained prominence. A synthetic hegemonic currency, backed by a basket of CBDCs, could provide more efficient domestic and cross-border payment services, benefiting from the credibility of multiple central banks that support it.”
Although a universal CBDC would be globally beneficial, the IMF’s paper mentions that the US dollar could still continue its dominance. Regardless, the IMF believes that the idea could swell the future of reserve currencies.
Currently, more than a few countries are considering the benefits of CBDCs. While many are still discussing the possibility, some like China and Sweden are already far ahead, and are running pilot tests. As of October, China had processed 1.1 billion yuan worth of pilot transactions as it tests its digital currency