Major Central Banks to Discuss Digital Currencies at IMF Meeting

Six central banks to enter CBDC discussions

Like an arms race between countries, the pursuit of central bank digital currencies (CBDCs) can quickly be compared to an arms race. CBDCs are a financial rifle relative to fiat currencies, and the whole world knows this. According to the Japan Times, on February 6, 2020, a person familiar with the matter said that the governors of several central banks will hold a meeting. The governors will discuss joint research on CBDCs. The group will also further consider the challenges that such a currency may face, with cybersecurity and cross-currency settlement being the most prominent factors.

These central banks include the United Kingdom, the European Union, Japan, Canada, Switzerland, and Sweden. They have agreed to meet in Washington, D.C. during the International Monetary Fund meeting. At that time, they will discuss cooperation on CBDC development between their respective countries, possibly forming a unified state-backed cryptocurrency, although this speculation is unlikely.

The push for cryptocurrencies

The meeting is part of a broader trend of central banks around the world trying to get involved in cryptocurrencies before the doomed Libra coin takes over the market again. In January, the Bank of England announced news about CBDC research. It has launched a joint research project with the aforementioned central bank institutions and added the participation of the Bank for International Settlements.

The Japan Times speculates that a report on the discussions will be released later this year and may provide details about goals and intentions.

The announcement of the Libra stablecoin last year brought a wake-up call to most major central banks. They were forced to study central bank-owned cryptocurrencies to counter the possible threat to the world’s monetization process at the time.

Symbolic leadership

China is currently leading the cryptocurrency arms race. Even if the coronavirus pandemic has slowed their progress a bit, they have already launched a pilot project within the country. Even so, the rest of the world is still catching up, with even the Federal Reserve finally announcing an investigation into their own form of CBDC.

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