Thursday, July 18, 2024
Google search engine
HomeBusinessAI can amplify benefits of eNaira and others – IMF

AI can amplify benefits of eNaira and others – IMF

Artificial Intelligence can amplify some of the benefits of the eNaira and other Central Bank digital currencies, the International Monetary Fund has disclosed. It stated that those benefits include improving financial inclusion through the provision of rapid, accurate credit scoring based on various data.

Drex will allow applications and redemptions of financial products 24/7/365, just like Pix or FEDNOW with money transfers.

According to the Washington-based lender, the benefits of CBDCs will depend on how technologies evolve. The IMF Managing Director, Kristalina Georgieva, revealed this during her keynote address at Singapore Fintech Festival.

She said, “AI, for instance, could amplify some of the benefits of CBDCs. It could improve financial inclusion by providing rapid, accurate credit scoring based on various data.

“It could provide personalised support to people with low financial literacy. To be sure, we need to protect personal privacy and data security, and avoid embedded biases, so we don’t perpetuate inequality, but aim to reduce it. Managed prudently, AI could help.”

She stated further that the tokenisation of financial assets, such as bonds issued on blockchains will open another door to CBDC, potentially in wholesale form, to pay for these assets.

Georgieva stressed that the benefits of CBDCs would stem from what happens in the payments’ environment, and that would depend on how many other countries adopt CBDCs, and to what extent would cash become obsolete.

She argued that many countries were investigating CBDCs and were developing regulations to guide digital money developments.

However, she noted a lot of work still needed to be done and there was still so much more space for innovation because of the plenty of uncertainty over use-cases for CBDCs. She declared that the public sector must keep preparing to deploy CBDCs and related payment platforms in the future.

Noting what the success of CBDCs would be hinged on, the IMF MD said, “The success of CBDCs will rely on policy decisions and how the private sector responds. The actions of many of you here today will matter. Country authorities wishing to introduce CBDCs may need to think a little more like entrepreneurs.

“Communication strategies, and incentives for distribution, integration, and adoption, are as important as design considerations.” She further announced the launch of a CBDC Handbook by the IMF, noting that the handbook was intended to collect and share knowledge on CBDCs for policymakers around the world.

Provided by SyndiGate Media Inc. (Syndigate.info)

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments