Central banks could issue state-backed digital currencies, says IMF

Central banks could issue digital currency, International Monetary Fund (IMF) managing director Christine Lagarde said today.

Speaking at an event in Singapore, Lagarde mooted a state-backed digital token, or an account held at the central bank for consumers and firms to use for retail payments.

As the demand for cashless payments increases, digital currency could provide security and consumer protection, she added, as the IMF launched a paper looking into the positives and negatives of central bank digital currency. 

“True, your deposits in commercial banks are already digital. But a digital currency would be a liability of the state, like cash today, not of a private firm,” she said.

Central banks around the world including Canada, China, Sweden and Uruguay are considering how to use cryptocurrencies.

“This is not science fiction," Lagarde said. "They are embracing change and new thinking – as indeed is the IMF.”

“I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy,” she added.