With several governments in the world seeking to introduce a national digital currency, the IMF is advocating for a private sector inclusive model.
Speaking at The Money Movement show, Deputy Division Chief at IMF, Tommaso Mancini-Griffoli, said that the initial model where the central bank would solely control the supply and distribution of the CBDC is no longer valid. Citing an instance of synthetic CBDC, where the private sector is involved in the creation process, customer management, and operations, he stated that this is the new ideal. He also noted that this new model of CBDC is an advancement from the older model that appropriated the complete control of CBDC with the central banks.
Advantages of private sector participation
One of the advantages that the IMF executive gave as a compelling reason for private sector involvement is the aspect of the workforce required to roll out these services. He noted that the private sector already has the people, and can rightly determine the technology that will be suitable for the creation and distribution of the digital currency.
Also, the new model of private participation will allow specialisation of the best arms. What this means, is that the private sector is known to lead in the innovative circle, while governments bodies do better are regulation. Therefore, a partnership of the private sector, with the regulatory agencies will give the right balance, which in turn will foster greater adoption and trust in the new ecosystem of payment services.
Source: Cryptonews
