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IMF / CROSS-BORDER PAYMENTS
STORY: IMF / CROSS-BORDER PAYMENTS
TRT: 02:55
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 19 OCTOBER 2020, WASHINGTON DC
RECENT - WASHINGTON DC
1. Wide shot, IMF building exterior
2. Wide shot, IMF building exterior with annual meetings signage
19 OCTOBER 2020, WASHINGTON DC
3. Med shot, MD Kristalina Georgieva speaking
4. SOUNDBITE (English) Kristalina Georgieva, Managing Director, IMF
“Fixing these shortcomings will require a concerted and coordinated global effort involving a variety of public and private actors. And it is urgent, given the need to spur economic recoveries and counter fragmentation, particularly post COVID-19. We must improve existing systems and we must explore new ones potentially taking advantage of central bank digital currencies. Coming up with new solutions could bring significant efficiency gains, but it could also affect monetary and financial stability. Widespread use of new forms of digital money could make it harder for country authorities to run independent monetary policy and control domestic financial conditions,”
5. Med shot, MD Kristalina Georgieva moderating panel
6. SOUNDBITE (English) Jerome Powell, Chair, Federal Reserve
“We are committed to carefully and thoughtfully evaluating the potential costs and benefits of a central bank digital currency for the U.S. economy and payment system, as well as for its international implications. We've been actively participating with other central banks and the BIS in that work. And we feel that collaboration has been very productive. We have not made a decision to issue it a CBDC, and we think that there's a great deal of work yet to be done, as well as extensive public consultation to be had with all stakeholders before making such a decision. The dollar is the world's principal reserve currency, as you pointed out. And I assure you that we will be approaching this question with great care”
7. Wide shot, MD Kristalina Georgieva speaking
8. SOUNDBITE (English) Ahmed Abdulkarim Alkholifey, Governor, Saudi Arabian Monetary Authority
“We believe digital payments, including the CBDC in both retail and wholesale situation would be helpful in supporting a safer and hopefully more efficient payment system overseen by central banks,”
9. Wide shot, MD Kristalina Georgieva speaking
10. SOUNDBITE (English) Agustín Carstens, General Manager, Bank of International Settlements
“The key difference with the CBDC is that the central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability. And also, we will have the technology to enforce that. Those are those two issues are extremely important”
RECENT - WASHINGTON DC
11. Wide shot, Annual meetings signage on IMF building
12. Wide shot, IMF building exterior
Central bank digital currencies backed by digitalization and technology could replace traditional cash in cross-border payments in some economies but with proper safeguards, said the IMF in “Cross-Border Payments—A Vision for the Future,” a seminar that took place Monday (19 Oct).
During the seminar, a group of distinguished panelists discussed potential solutions to enhancing cross-border payments, the benefits and risks of cross-border use of digital currencies, and their macro-financial implications.
The seminar was moderated by IMF Managing Director Kristalina Georgieva and panelists included Jerome Powell, Chair of the Federal Reserve, Ahmed Abdulkarim Alkholifey, Governor of the Saudi Arabian Monetary Authority, Agustín Carstens, General Manager of the Bank of International Settlements, and Nor Shamsiah Yunus, Governor of the Central Bank of Malaysia.
MD Georgieva opened the discussion by stressing that now the world has a chance to improve cross-border Payments, especially for many of the world’s poorest people and that there is a pressing need to do so at a time when technology is accelerating and changing lives. She also gave her recommendations on how to tackle the issue.
“Fixing these shortcomings will require a concerted and coordinated global effort involving a variety of public and private actors. And it is urgent, given the need to spur economic recoveries and counter fragmentation, particularly post COVID-19. We must improve existing systems and we must explore new ones potentially taking advantage of central bank digital currencies. Coming up with new solutions could bring significant efficiency gains, but it could also affect monetary and financial stability. Widespread use of new forms of digital money could make it harder for country authorities to run independent monetary policy and control domestic financial conditions,” said Georgieva.
Chair of the Federal Reserve, Jerome Powell announced the Federal Reserve’s commitment to evaluating the potential costs and benefits of a Central Bank Digital Currency for the U.S. economy and payment system, but the decision hasn’t been made yet. He also argued that the decision to issue a CBDC will be made by each individual country since the opportunities and risks will differ by country and jurisdiction.
“We are committed to carefully and thoughtfully evaluating the potential costs and benefits of a central bank digital currency for the U.S. economy and payment system, as well as for its international implications. We've been actively participating with other central banks and the BIS in that work. And we feel that collaboration has been very productive. We have not made a decision to issue it a CBDC, and we think that there's a great deal of work yet to be done, as well as extensive public consultation to be had with all stakeholders before making such a decision. The dollar is the world's principal reserve currency, as you pointed out. And I assure you that we will be approaching this question with great care,” said Powell.
Governor of the Saudi Arabian Monetary Authority, Ahmed Abdulkarim Alkholifey shared his government’s experience with exploring the area of the design of the wholesale CBDC and its application in the issue of a single currency as well as cross-border settlement through Aber, a project they did in collaboration with the United Arab Emirates Central Bank.
“We believe digital payments, including the CBDC in both retail and wholesale situation would be helpful in supporting a safer and hopefully more efficient payment system overseen by central banks,” said Alkholifey.
Agustín Carstens, Bank of International Settlements’ General Manager, said that he doesn’t believe that CBDC by itself a threat to the international monetary system and since central banks will have control that will provide grounds on how to facilitate payments internationally.
“The key difference with the CBDC is that the central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability. And also, we will have the technology to enforce that. Those are those two issues are extremely important,” said Carstens.
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