CBDC with public-private partnership
The vice president of the Capital Markets Department of the International Monetary Fund (IMF), Tommaso Mancini-Griffoli, declared that the best way to advance in the Digital Currencies of the Central Bank (CBDC) is through a public-private association.
Collaboration between banks and stablecoins looks promising
The vice president of the Capital Markets Department of the International Monetary Fund (IMF), Tommaso Mancini-Griffoli, declared that the best way to advance in the Digital Currencies of the Central Bank (CBDC) is through a public-private association. Mancini-Griffoa believes that the creation of a CBDC controlled and backed by a central bank is an outdated idea since that would only involve digitizing the current monetary system without introducing significant changes in its operation.
** Earlier this month, a group of independent experts from central banking and economic policy participating in the Official Forum of Monetary and Financial Institutions (OMFIF) announced the launch of its Digital Monetary Institute.
The idea of creating a CBDC that works through an association of the public and private sectors is gaining popularity in the world of digital currencies. This type of digital currency would allow the private sector to focus on innovation, interface design and customer management, while the public sector would focus on regulation and trust-building: this type of partnership is expected to encourage innovation but within a regulated framework for financial stability. Mancini-Griffoli believes that the public sector would solve the risks involved in stablecoins: “There are several different stablecoins available. It is difficult for consumers to know which ones are fully compatible and which really offer a claim on the underlying reserves and how liquid and safe these reserves are and whether they are liquid and safe enough in every state in the world."
** After the authorities of the Bank for International Settlements published its report in which it explains the great dangers it has in cash in relation to the spread of the COVID-19 pandemic, the Deutsche Bank has decided to accelerate the development of its own digital currency (CBDC).
Through this system, a large part of the costs and risks, such as customer management, detection and monitoring, as well as regulatory compliance, are transferred to the private sector. However, there are debates over who should have the ability to issue the tokens. In this regard Mancini-Griffoa said: “The question is where do you draw the line of what the public sector does and what the private sector does. The fundamental question is about the issue. Does the public sector issue and the private sector distribute or do we also allow the private sector to issue? "