Speech

High-level Policy Roundtable on Central Bank Digital Currencies: The Role of the Public Sector in Money and Payments – A New Vision

June 19, 2023

As prepared for Delivery

Good morning, I am delighted to be visiting Morocco again. I would like to start by thanking the authorities for hosting the Annual Meetings of the IMF and the World Bank this October in Marrakech. Morocco, a country that bridges Africa, the Middle East, and Europe, is the ideal place for the world to come together to discuss solutions to common challenges. So, thank you Morocco for convening us all. May your rich history, great traditions, and exceptional hospitality inspire us all to do what the world is calling on us to do.

I want to thank Governor Jouahri for his hospitality and the warm welcome. I would also like to recognize the continued partnership between the IMF and Morocco in co-hosting this event – with the presence of high-level speakers from across the world – as we proceed to the upcoming 2023 IMF and World Bank Annual Meetings.

I have just wrapped up an excellent panel discussion with Governor of Bank Al Maghrib Abdellatif Jouahri on Central Bank Digital Currencies (CBDCs) as part of the High-level Policy Roundtable on Central Bank Digital Currencies: The Role of the Public Sector in Money and Payments – A New Vision.

Our Discussions at today’s panel were exceptionally constructive, as our main objective with this high-level event is to bring this very important discussion on CBDCs to Africa.

We agreed on the need to continue dialogue on CBDCs and to gather and share knowledge and information for the benefit of our member countries in Africa, the Middle East, and beyond. We also highlighted the value of enhancing our coordination efforts on the links between digitization, fintech and economic reform.

Harnessing the digital transition is also a key theme of our 2023 Annual Meetings.

In my remarks, I stressed that CBDCs could help to increase inclusion by giving more people access to financial services, and at a lower cost, strengthen the resilience and efficiency of payment systems, and make cross-border payments and remittances cheaper and quicker. However, if poorly designed, CBDCs could also lead to financial stability risks, data privacy and legal challenges, financial integrity and cyber risks, and central bank operational risks.

In addition, CBDCs could reduce the number of intermediaries in cross-border payments, foster competition and enhance transparency. However, easy access to foreign CBDCs could lead to risks of currency substitution and capital flow volatility.

These are important considerations for the IMF, as we have a mandate to help ensure that digital money, including CBDCs, fosters domestic and international economic and financial stability. It is in this regard that I see this roundtable as a continuation of our recent – September 2022 – conversations in Jeddah on CBDCs in the region. It is also in line with two upcoming IMF papers on CBDC one on ‘CBDC and Private Digital Payments in Sub-Saharan Africa’, and one on ‘A roadmap to CBDC in the Middle East and Central Asia’ which will provide new analysis and learning from these regions.

I am looking forward to the rest of my visit in Rabat today, and to Marrakech tomorrow. Shukran!