Digital currencies issued by central banks have the possibility to displace cash, but adoption may take some time, according to International Monetary Fund managing director Kristalina Georgieva, who made this announcement on Wednesday.
“CBDCs can serve as a substitute for cash, which can be expensive for distribution in island economies,” she stated at the Singapore FinTech Festival on Wednesday. In more developed economies, they can provide resilience. And in areas where few people have bank accounts, they help enhance financial inclusion.”
A nation’s digital version of fiat money, or CBDCs, is governed by the central bank of that nation. They enable central banks to distribute government payments straight to families because they are supported by blockchain technology.