An interesting Twitter poll titled, “Are Digital Currencies Real Money” regarding digital currencies posted by the International Monetary Fund [IMF] has already received 75K votes and counting. Surprisingly, more than 80% of all the voters till now agree to this notion and believe Digital Currencies are actual Money.
Are digital currencies really money? #poll
— IMF (@IMFNews) January 14, 2021
IMFs Recent Digital Currency Report and Poll, What’s next?
The uncertain economic situation due to the COVID19 pandemic has pushed many central banks and national governments to explore the usage of digital currencies to stabilize the falling economies. IMF recently came with a report exploring the scope for digital currencies in the international reserve ecosystem currently dominated by the US Dollar.
So, why the IMF is after digital currencies? Here’s what we found can be possible reasons.
- We live in a world where pandemics like COVID19 are plausible possibilities in the future too, in these uncertain situations digital currencies can be an alternative whilst reconfiguration of the international reserves ecosystem.
- Will Digital Currencies reserves replace US Dollar? No, the authors of the paper believe no it will not, and even if digital currencies are adopted US dollar will retain its dominant status.
- Paper also explores private digital currencies operated by private companies like FB Inc. which recently launched Diem. Authors believe such currencies can very co-exist as stablecoins alongside CBDCs.
Key reasons cited while Libra’s launch that such currency can very well overwhelm currencies in smaller economies and as such Facebook modified the design and plans to launch multiple stablecoins backed by currencies of individual countries.