IMF Sees ‘Critical Role’ as World Transitions to Digital Money

IMF Sees ‘Critical Role’ as World Transitions to Digital Money

The International Monetary Fund logo is seen outside its headquarters during the IMF/World Bank spring meetings in Washington, US, April 20, 2018. (Reuters)

The International Monetary Fund must ramp up its resources as it seeks to "monitor, advise on, and help manage this far-reaching and complex transition" to digital money, according to an IMF paper published on Thursday.

Digital money can make payments more accessible, faster and cheaper, the paper said. But to make that happen, policymakers must step up to key challenges: digital cash must be trustworthy, must protect domestic economic and financial stability, and the stability of the international monetary system should remain.

"The Fund has a critical role to play to help its members harness the benefits and manage the risks of digital money," the paper said.

Importantly, digital money "must be regulated, designed, and provided so countries maintain control over monetary policy, financial conditions, capital account openness, and foreign exchange regimes".

The paper makes the distinction between central bank digital currencies, stablecoins and e-Money, on which it focuses, and cryptoassets including bitcoin. "While different types of digital money are considered, this paper does not take a stand on which form may predominate."

The paper, dated March, discussed by the IMF board in