IMF Recommends Strategies For Global CBDC Adoption

According to Cointelegraph, the International Monetary Fund (IMF) staff members have issued a guide for policymakers and banking institutions on enhancing the global uptake of central bank digital currencies (CBDCs). The guide, titled ‘Central Bank Digital Currency Adoption Inclusive Strategies for Intermediaries and Users,’ was released on September 21 and emphasizes the need for inclusive strategies for both intermediaries and end-users. It introduces the REDI framework to facilitate CBDC adoption. The IMF staff members highlighted that successful CBDC adoption requires proactive strategic policy and design choices that benefit both end-users and intermediaries. They urged central banks to prioritize stakeholder engagement. The REDI framework, which stands for regulation, education, design and deployment, and incentives, is designed to assist central banks in improving CBDC adoption within their countries. The framework focuses on four key pillars. The regulation pillar involves exploring potential regulatory and legislative measures to foster CBDC adoption. The education pillar recommends developing communication strategies to build CBDC awareness, with central banks serving as the central point of communication. The design and deployment pillar emphasizes the need for strategies targeting specific user groups and creating an extensive network of intermediaries. Lastly, the incentives pillar suggests introducing monetary and non-monetary incentives to encourage mass adoption of CBDCs, such as subsidizing setup costs, transaction fees, and taxes for merchants. The paper also called for further discussions on pre-existing concerns, including the sustainability of the CBDC system, ensuring the integrity of the system, and balancing adoption with financial stability. In a related note, in August, two IMF executives proposed that increasing the average crypto-mining electricity costs globally by up to 85% through taxes could significantly reduce carbon emissions. Shafik Hebous, deputy division chief of the IMF Fiscal Affairs Department, and Nate Vernon-Lin, climate policy division economist, suggested that a tax of $0.047 per kilowatt hour could drive the crypto mining industry to curb its emissions in line with global goals.