IMF Gives Jordan’s Central Bank Tips For Retail CBDC
The Central Bank of Jordan has moved one step closer to launching a retail CBDC (rCBDC) following the completion of a technical report by the International Monetary Fund (IMF) on the country’s financial markets.
IMF Release Feasibility Report To Help Jordan’s Central Bank
Last year, the IMF conducted a three-month mission to aid the bank in preparing for a feasibility report on the CBDC. Then, the IMF published its report earlier this week.
The IMF mainly provided a positive evaluation of the country’s current retail payment market based on data gathered from July to September 2022. The report highlighted that the market is well-integrated, and two non-bank payment service providers (PSPs) offer appropriate and generally accessible products.
Additionally, the report said the country has many smartphones in circulation. Despite this, an rCBDC could further financial inclusion by offering services to individuals who do not possess smartphones.
Furthermore, an rCBDC could enhance the domestic payment system by enabling payment service providers (PSPs) to access its infrastructure. In addition, it can reduce the cost of cross-border transfers.
In its report, the IMF cautioned the country against disintermediation in its financial system. According to the IMF, this could cause instability during economic stress.
Data shows that the nation’s financial sector has top-notch information security, management, and governance practices. However, the IMF warned that an rCBDC could pose cybersecurity risks due to its functions.
As a result, the report emphasized the importance of establishing solid legal foundations for an rCBDC. It added, “although RCBDC might have some advantages, it does not adequately handle the pain points. Conversely, a cross-border rCBDC may provide more value, especially if the authorities collaborate with neighboring countries in the area.”
One of the pain points is that an rCBDC would not address the country’s dependence on cash and poor financial literacy.
The IMF Shows Support For CBDC, Not Crypto
In February 2022, the Jordanian central bank revealed its investigation into a CBDC, although cryptocurrency trading is illegal in Jordan. However, the parliament opposed a central bank proposal to bring crypto trading.
Recently, news reports revealed that the IMF executive board had endorsed a crypto policy framework dated January 2023 but released on February 23rd. According to the report, the executives agreed that crypto should not become legal tender.
Meanwhile, the IMF has always been vocal concerning its opposition to crypto usage as a legal tender, especially since El Salvador embraced Bitcoin as a legal tender in September 2021. Additionally, the IMF has advocated for more extensive regulation of cryptocurrency adoption.
In contrast to its stance on cryptocurrency, the IMF views central bank digital currency with greater favor. In September, the organization revealed that it was developing an interoperable CBDC system.
Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.
