March 28, 2024

Tao Zhang: “State cryptocurrencies can improve the traditional financial system”

Deputy Managing Director of the International Monetary Fund (IMF) Tao Zhang said thatgovernment cryptocurrencies can become an “affordable and legal digital form of fiat money.”

Zhang emphasized that government digital currencies can bring many benefits to the traditional financial system.

“Most importantly, it will be more effectivepayment system. Secondly, a more affordable financial system. Thirdly, increasing stability and lowering entry barriers for new companies. Fourth, the strengthening of monetary policy. And fifthly, state cryptocurrencies will be able to counter the launch of new digital currencies, ”Zhang said.

The analytical company CB Insights conducted a study of the state cryptocurrency market. According to analysts, two types of such currencies are being developed in different countries: basic and banking.

Base digital currencies should replace papermoney and allow citizens to open accounts directly with the Central Bank. Banking digital currencies should become a means of interbank payments and may pose a threat to the current banking system.

Researchers also said that 80% of central banks surveyed are exploring the possibilities of state-owned cryptocurrencies.

In early February, Jerome Powell, chairman of the Federal Reserve's governing council, speaking to Congress, said the Fed was actively working on a “digital dollar.”

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