Introductory Remarks at Global Conference on the G20 Data Gaps Initiative 3 (DGI-3)
IMF News, June 14, 2023
Source details
- Canonical URL
- Introductory Remarks at Global Conference on the G20 Data Gaps Initiative 3 (DGI-3)
Other formats
Bibliographic details
- Authors: IMF Deputy Managing Director Bo Li Panel Discussion
- Published: June 14, 2023
Context and event
- Speaker: IMF Deputy Managing Director Bo Li
- Event: Global Conference on the G20 Data Gaps Initiative 3 (DGI-3) — Panel Discussion: Digitally Driven Financial Innovation
- Date: June 14, 2023
Opportunities from digital financial innovation
- Digital money and Fintech credit services are reshaping the financial landscape, offering potential benefits for:
- economic growth
- financial inclusion
- Digitalization has made financial services more accessible and affordable for those who remain unbanked, including:
- the poor
- the young
- women
Risks and challenges identified
- Fintech credit activity outside of the regulatory perimeter is growing rapidly and could lead to more procyclical credit provision.
- Growing competition may prompt traditional banks to lower credit standards and increase risk-taking.
- Crypto assets are already affecting some emerging market and developing economies with significant holdings of liquid assets that are issued abroad.
- “Cryptoization” (domestic currency substitution by digital money such as CBDCs, stablecoins, or other crypto assets) can have seriously negative consequences:
- Broad money and international capital flows could become significantly underestimated.
- Underestimation could undermine the effectiveness of domestic monetary policies.
- There is a risk of loss of monetary sovereignty.
Policy implications and central bank priorities
- Central banks must ensure financial systems remain stable and resilient amid digitalization.
- Traditional frameworks for conducting monetary policy may need to adapt to effectively address new dynamics introduced by digital money and Fintech.
Data gaps, G20 role, and recommended actions
- Quality data is central to sound policy decisions; as the digital economy expands, timely and reliable data becomes even more critical.
- Tackling data gaps in digital financial innovation is an urgent priority.
- The G20 can play an important role by:
- improving the formal “accounting” of new forms of money and Fintech credit services
- enhancing data availability
- promoting data-sharing frameworks
Panel and purpose of the discussion
- The panel of experts will:
- examine challenges and opportunities from the digitalization of financial services
- discuss the essential role of data for prudent and proactive policymaking
- address how to close critical data gaps in digital financial innovations
Introductory Remarks by IMF Deputy Managing Director Bo Li at Global Conference on the G20 Data Gaps Initiative 3 (DGI-3), June 14, 2023