The Rise of Digital Money: A Strategic Plan to Continue Delivering On The IMF’s Mandate

Policy Papers, July 29, 2021

Source details

Canonical URL: The Rise of Digital Money: A Strategic Plan to Continue Delivering On The IMF’s Mandate

Rapid technological innovation is ushering in a new era of public and private digital money, bringing about major benefits in terms of efficiency and inclusion.
To reap the full benefits and manage risks, authorities around the world will have to address new policy challenges that are widespread, complex, and rapidly evolving.
The paper identifies the main challenges currently arising regarding:
- consumer protection and financial integrity,
- domestic financial and economic stability,
- the stability and efficiency of the international monetary system.
Many of these challenges intersect the Fund’s mandate; the Fund must therefore monitor, and advise on, this rapid and complex transition for all members.
The paper presents a broad vision for how the Fund can deliver on this mandate, including by enhancing resources and collaborating closely with other institutions.
This is the first of two papers; the second lays out a more detailed operational strategy.

Consumer protection and financial integrity issues arising from new forms of digital money.
Domestic financial and economic stability risks tied to the adoption and design of digital money.
Systemic considerations for the stability and efficiency of the international monetary system posed by cross-border digital money flows and private digital money providers.
Rapidly evolving technological and market developments that complicate policy responses and regulatory frameworks.

The Fund should monitor developments in digital money and advise members across the identified challenge areas.
The Fund should enhance internal resources to meet the demands of monitoring and advising on digital money transitions.
Close collaboration with other institutions is recommended to manage cross-cutting and international aspects of digital money policy.
The paper serves as a strategic framing; operational specifics are deferred to a subsequent paper that outlines a more detailed operational strategy.

Subject: Central Bank digital currencies, Currencies, Digital currencies, Financial sector policy and analysis, Financial sector stability, Monetary policy, Money, Political economy, Technology, Virtual currencies
Keywords: Central Bank digital currencies, Currencies, Digital currencies, digital money adoption, Financial sector stability, Global, IMF's mandate, issued digital money provider, paper at-a-Glance, transparency policy, Virtual currencies

Source: The Rise of Digital Money: A Strategic Plan to Continue Delivering On The IMF’s Mandate (Policy Paper No. 2021/054), July 29, 2021.