The International Monetary Fund (IMF) has released a comprehensive guide aimed at policymakers and banking institutions to promote the global adoption of central bank digital currencies (CBDCs). This guide, titled “Central Bank Digital Currency Adoption: Inclusive Strategies for Intermediaries and Users,” was published on September 21. It advocates for the implementation of inclusive strategies that cater to both intermediaries and end-users.
The document presents a high-level framework encompassing regulation, education, design and deployment, and incentives (REDI), all designed to facilitate the uptake of CBDCs. According to the IMF team, effective CBDC adoption hinges on strategic policy and design decisions that prioritize the needs of end-users and intermediaries. As such, they emphasized the importance of engaging stakeholders throughout the process.
The REDI framework, developed by IMF experts, aims to assist central banks in enhancing CBDC adoption within their nations.
REDI framework for central banks to help CBDC adoption. Source: IMF
The framework is constructed around four essential pillars. The first pillar, regulation, encourages policymakers to investigate regulatory and legislative measures that can foster CBDC adoption. The education pillar suggests the creation of communication strategies to raise awareness about CBDCs, positioning central banks as the primary source of information.
The third pillar emphasizes the need for targeted strategies that cater to specific user demographics and the establishment of a broad network of intermediaries. Lastly, the incentives pillar advocates for both monetary and non-monetary incentives to stimulate widespread CBDC adoption. Recommendations include subsidizing initial setup costs, transaction fees, and taxes for merchants.
Additionally, the paper calls for ongoing dialogue regarding existing concerns:
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In a related development, two IMF executives noted in August that significantly increasing global electricity costs for crypto mining—by as much as 85% through taxation—could greatly diminish carbon emissions. Shafik Hebous, deputy division chief of the IMF’s Fiscal Affairs Department, and Nate Vernon-Lin, an economist in the climate policy division, suggested that a tax of $0.047 per kilowatt-hour would incentivize the crypto mining sector to align its emissions with global environmental goals.
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