Not long ago, the concept of a global digital currency was largely dismissed as the product of conspiratorial drama and dystopian fiction. Now, the International Monetary Fund (IMF) is explicitly calling for the development of a world digital currency. Investors can better protect their wealth and privacy from the worsening effects of monetary digitization by staying ahead of the trend of economic digitization.
What is a global CBDC?
A global central bank digital currency (CBDC) is a hypothetical worldwide digital banknote. It would be universally accepted and usable by consumers for domestic and international payments. In theory, this supranational currency could replace physical cash for everyday transactions. A global CBDC would be issued, regulated, and controlled by an international governing body such as the IMF, the Bank for International Settlements (BIS), or the World Bank.
Domestic vs. Global CBDC
The potential of a global CDBC raises questions about the currency’s relationship with domestic CBDCs. In reality, these digital developments are mirror images of each other only with differences in scope of use, issuing authority, and monetary system. For example, a potential United States CBDC would primarily be used within American borders, it would be issued by the Federal Reserve, and it would be beholden to the USD monetary system. Theoretically, domestic CBDCs would remain within the confines of each country while the global CBDC would regulate international transactions.
The IMF’s Role in the Development of a Global CBDC
As the head of the international monetary system, the IMF wields tremendous influence on the trajectory of macro and microeconomics. In fact, this international financial authority has the power to surveil domestic economies, determine which countries receive loans, and promulgate economic policies. Currently, over 190 countries are subject to the authority of the IMF, underscoring the group’s supremacy. Over the past few years, the IMF has been making concerted moves toward the development of a global CBDC. These efforts aren’t being hidden from the public, but they’re also not being covered by mainstream media.
“Centralization is what people should be worried about. The fact that a very small group of people can control everybody’s…access to the monetary system.”– Precious Metals Advisor Steve Rand
The Global CDBC Challenge
The IMF partnered with the Monetary Authority of Singapore (MAS), the city-state’s central bank, to host a worldwide contest for digital currency technology. The stated aim of the Global CBDC Challenge was to accelerate the development of technologies required to implement a CBDC on a large scale. Over 50 countries took part in the challenge with more than 300 individual proposals submitted. With a heavy focus on practical limitations and technological capabilities, this challenge underscores the IMF’s dedication to rolling out CBDCs across the globe.
The Digital Money Strategy
Just a month after the global CBDC challenge, the IMF put forth a Digital Money Strategy that mandated the group to “monitor, and advise on, digital money developments for all members” with specific attention paid to CBDCs. Furthermore, to meet the “challenges posed by CBDCs”, the IMF outlined its plans to expand resources and increase spending. Additionally, the strategy called for more cooperation with an international consortium of financial bigwigs including the World Bank, Bank for International Settlements (BIS), Committee on Payments and Market Infrastructures (CPMI), and Financial Stability Board (FSB).
CBDC Capacity Development
Recently, the IMF has been going much further than setting general policies or hosting contests in terms of global CBDC development. In April 2023, the world financial czar released a report highlighting its hands-on role in the research, development, and implementation of centralized digital currencies around the globe. In fact, the IMF is directly advising more than 40 of the over 100 countries pursuing a CBDC. More specifically, the report highlighted the IMF’s goal of influencing how central bank authorities think about CBDCs. This standardized approach to domestic digital currencies is a direct path toward a global CBDC.
IMF Calls for a Global CDBC
Most of the IMF’s involvement with a global CBDC could have fallen under the convenient categories of “hypothetical” or “experimental”. That was until the group’s Managing Director revealed that work was already underway to build an international CBDC framework. At a financial conference in Morocco, Kristalina Georgieva shared that the IMF was building towards “a global CBDC platform.” She stressed the importance of having an interoperable system that connects countries in an increasingly digitized currency system, warning that a lack of cooperation could encourage the use of cryptocurrencies.
Investing in the Time of a Global CBDC
As the preeminent leader in the global economy, the IMF’s attitude towards the digital economy can tell investors a lot about the future of digital currencies. In a revealing way, the IMF has fully embraced a global CBDC to the point of actively pursuing a fully centralized system.
Everyday investors might not have the influence to avert the IMF’s trajectory towards a global CBDC, but they can direct their investments accordingly. There’s a reason central banks are buying gold at record rates. Even the governments don’t trust these hyper centralized, supranational economic policies.
“Physical gold in your possession [is] the original decentralization. [It’s] the true way to get away from these digital currencies.”– Precious Metals Advisor Todd Graf
Smart money is following suit by diversifying their portfolios with gold. This shiny metal is a proven hedge against inflation that offers reliable price stability along with security and privacy.
The world economy is on a crash course toward a fully digitized money system with consolidated authority on the international stage. Staying up to date on key developments can keep investors in the best position to make savvy investment decisions. To help you keep track more easily, we’ve created a FREE CBDC Exposure Report. Request your FREE COPY here!