International Monetary Fund Managing Director Christine Lagarde said central banks should look into issuing digital currencies.
“Various central banks around the world are seriously considering these ideas,” Lagarde said in Singapore on Wednesday. “While the case for digital currency is not universal, we should investigate it further, seriously, carefully, and creatively.”
Monetary policy makers from Uruguay to Canada are already researching the idea, with Sweden’s Riksbank saying just last month it will seek to start a pilot project next year to develop an electronic currency.
Economies around the world are becoming increasingly cashless as credit and debit cards or even mobile phone apps are used as modes of payment. A report last month by Bloomberg Intelligence suggested central banks could eventually destroy the value of Bitcoin and other cryptocurrencies by issuing their own tokens.
Meanwhile, the International Monetary Fund said economic growth is expected to accelerate in Gulf Arab nations because rising oil prices have let them spend more on development projects, but the outlook appears “challenging” and reforms are essential.
The Washington-based lender expects the economies of the six-member Gulf Cooperation Council to grow 2.4 per cent this year and 3 per cent in 2019, slightly higher than a May forecast and a reversal from a 0.4 per cent contraction last year.
At the same time, it expects non-oil gross domestic product expansion to remain at 2.7 per cent this year. Higher oil prices, the IMF urged, shouldn’t deflect GCC nations — Saudi Arabia, United Arab Emirates, Kuwait, Oman, Qatar and Bahrain — from pushing ahead with reforms meant to diversify their economies and boost the private sector.