IMF urges careful design, slow introduction for Pacific Island digital currencies — TradingView News
Conditions in Pacific Island countries (PICs) create unique currency needs. Digital currencies are up to the task of meeting those needs, with the right design features, the International Monetary Fund (IMF) found in a new paper. At the same time, it warned against the use of unbacked cryptocurrencies as national currency.
PICs are tiny, diverse and geographically isolated markets with particular servicing and inclusion challenges, such as a high dependence on remittances and vulnerability to reduced correspondent bank services. They are also liable to run afoul of international Anti-Money Laundering efforts because of poor controls.
PICs differ by the development of local payment systems and whether they have their own fiat currency, among other things. Some PICs have no local financial infrastructure at all.
It’s great to see the fruits of last year’s IMF Conference in Fiji
The departmental paper, “Rise of Digital Money: Implications for Pacific Island Countries,” delves into the fast-evolving landscape of digital money in a diverse region of extremes in size, remoteness and… pic.twitter.com/z4c8qrHB4S
PICs predominantly trade with large countries outside the region. Developing a regional approach to digital money would help mitigate problems such as scalability restraints and economic volatility, the IMF said. The path of digitization may be long for some PICs that do not have even adequate internet connectivity yet.
