The issuance of central bank digital currencies (CBDCs) by apex global banks has become a hot topic in the crypto space, and the International Monetary Fund (IMF) has delved into it with some precautionary measures.
The IMF believes that strong legal frameworks are necessitated because CBDCs pose reputational, financial, and legal risks for central banks.
A race against time
The issuance of CBDCs seems to be a race against time because, in the eyes of many nations, owning a CBDC is instrumental in having control of the global markets. This can be shown by the fact that the Bank for International Settlements (BIS), along with seven central banks, recently released a report identifying the foundational principles necessary for any publicly available CBDCs to help central banks meet their public policy objectives.
The IMF has, however, advised central banks to tread with caution because they may be jumping the gun by overlooking some essential legal frameworks needed for a CBDC to…