Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
IMF Magazine: Money Revolution in the Age of Crypto and CBDCs
IMF blog | Gita Bhatt | Sep 1, 2022
The recent plunge in crypto assets has left investors numbed by losses and surely in doubt. But the future of money is undoubtedly digital. The question is, what will it look like? In our latest issue of Finance & Development, some of the world’s leading experts try to answer this complex and politically charged question.
See more NCFA hosted Fintech reports and research
Not every form of digital money will prove viable. Bitcoin, now down nearly 70 percent from its November peak, and other crypto assets fail as money, says Singapore’s Ravi Menon, among others. While they are actively traded and heavily speculated on, prices are divorced from any underlying economic value. Stablecoins are designed to rein in the volatility, but many have proved to be anything but stable, Menon adds, and depend on the quality of the reserve assets backing them.
Still, journalist Michael Casey argues, decentralized finance and crypto are not only here to stay but can address real-world problems such as the energy crisis.
Regulation is key. The regulatory fabric is being woven, and a pattern is expected to emerge, explain the IMF’s Aditya Narain and Marina Moretti. But the longer this takes, they argue, the more national authorities will get locked into differing regulatory frameworks. They call for globally coordinated regulation to bring order to markets, help instill consumer confidence, and provide a safe space for innovation.
Meanwhile, central banks are considering their own digital currencies. Bank for International Settlements chief Agustín Carstens and his coauthors suggest that central banks should harness the technological innovations offered by crypto while also providing a crucial foundation of trust. Privacy and cybersecurity risks can be managed with responsibly designed central bank digital currencies, adds the Atlantic Council’s Josh Lipsky.
Read: World Bank Report: Fintech and the Future of Finance
Elsewhere in the issue, our contributors look at the benefits and drawbacks of decentralized finance, the future of cross-border payments, and how India and countries in Africa are advancing the digital payment frontier.
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