The IMF announced recently a plan to launch a global digital currency platform for central banks.
The platform for central bank digital currencies (CBDCs) will enable transactions between countries, said IMF Managing Director Kristalina Georgieva.
The global digital currency platform can also help make remittances cheaper, she said, adding that the average cost of money transfers is 6.3% amounting to $44 billion annually.
There are already 114 central banks are at some stage of CBDC exploration, according to the IMF chief.
However only 10 are crossing the finishing line, she added.
"If countries develop CBDCs only for domestic deployment we are underutilising their capacity," Georgieva noted.
"CBDCs should not be fragmented national propositions... To have more efficient and fairer transactions we need systems that connect countries: we need interoperability," she said.
According to her, central banks have to agree on a common regulatory framework for digital currencies that will allow global interoperability.
Failure to agree on a common platform would create a vacuum that would likely be filled by cryptocurrencies, she added.
She stressed that CBDCs is different from cryptocurrencies available today as they are backed by assets.
“Cryptocurrencies are an investment opportunity when backed by assets, but when they are not they are a speculative investment,” she said.
