IMF Proposes Digital Money to Enhance Financial Inclusion in Pacific Island Nations

cryptonews.com:

The International Monetary Fund (IMF) has suggested that digital money could significantly improve financial inclusion and enhance the quality of financial services in the remote and dispersed nations of the Pacific Ocean. 

In a  report published on March 25 , the IMF’s senior economic experts examined the potential impact of both private stablecoins and central bank digital currencies (CBDCs) on the economies of Pacific Islands countries.

The report noted the that nations have limited and unequal access to financial services, which contributes to persistent poverty and inequality. 

Moreover, these countries heavily rely on remittance flows, making them particularly vulnerable to the diminishing correspondent banking relationships.

To address these issues, the IMF believes that embracing the digital money revolution could unlock several benefits for the Pacific Island nations. 

By developing robust payment systems, expanding financial inclusion, and mitigating the loss of correspondent banking relationships, these nations can pave the way for economic growth and stability.

While the report predominantly focuses on CBDCs, a cause strongly advocated by the IMF, it also acknowledges the potential of private stablecoins backed by foreign currencies. 

The IMF advises against smaller Pacific Island countries issuing their own sovereign stablecoins due to limited oversight capacities. 

However, the report specifically mentions  Tether  as a private stablecoin.

IMF urges careful design, slow introduction for Pacific Island digital currencies
The island nations have common challenges and widely varying conditions. Just don’t use crypto, the IMF says.

— Mr Legend Crypto (@mrlegendcrypto) February 28, 2024

For Pacific Island