Staff members from the International Monetary Fund (IMF) have published a comprehensive guide aimed at policymakers and financial institutions, detailing strategies to enhance the global adoption of central bank digital currencies (CBDCs).
On September 21, the IMF released the document titled “Central Bank Digital Currency Adoption: Inclusive Strategies for Intermediaries and Users.” This paper advocates for the implementation of inclusive strategies that cater to both intermediaries and end-users. It presents a high-level framework consisting of regulation, education, design and deployment, and incentives (REDI) to encourage the uptake of CBDCs.
According to the IMF team, the successful adoption of CBDCs hinges on proactive and strategic policy decisions that serve the interests of both end-users and intermediaries. They emphasized the importance of engaging stakeholders in the process.
The REDI framework, developed by IMF staff, aims to assist central banks in boosting CBDC adoption within their countries.
REDI framework for central banks to help CBDC adoption. Source: IMF
The REDI framework centers around four essential pillars. The first pillar, regulation, encourages policymakers to consider potential regulatory and legislative actions that could facilitate CBDC adoption.
The education pillar suggests creating communication strategies to raise awareness about CBDCs, positioning central banks as the primary source of information. The third pillar underscores the necessity for tailored strategies that focus on specific user demographics and the establishment of a broad network of intermediaries.
Lastly, the incentives pillar recommends both monetary and non-monetary incentives to promote widespread CBDC adoption. Among the suggestions put forth by IMF staff are subsidies for setup costs, transaction fees, and taxes for merchants.
The paper also called for continued dialogue regarding existing concerns:
Related:
IMF Supports Nigeria’s Crypto Adoption Amid Local SEC Scrutiny
In August, two IMF officials stated that increasing global electricity costs for crypto mining by up to 85% through taxation could significantly diminish carbon emissions. Deputy Division Chief of the IMF Fiscal Affairs Department, Shafik Hebous, and Climate Policy Division Economist, Nate Vernon-Lin, indicated that a tax of $0.047 per kilowatt-hour would incentivize the crypto mining sector to reduce its emissions to align with global objectives.
Magazine:
What Solana’s Critics Get Right… and What They Get Wrong