Advances made in digital money can help reshape cross-border payments and remittances making them “easier, faster and cheaper”, Kristalina Georgieva, managing director of the International Monetary Fund, said.
Divergences in access to vaccines, in recoveries from the pandemic and access to a digital future are challenges the world must address, Ms Georgieva said at a virtual workshop on how digital money can facilitate remittances.
Remittances have played a key role in improving the lives of people in developing economies and supporting economic activity, and can benefit from the "revolution" in digital money, she said.
With the risk of a growing digital divide between rich and poor countries, we must ensure that all countries can benefit from the latest innovations in digital money and payments, particularly remittances
"We need to use every tool we can to support those most affected by the pandemic. And with the risk of a growing digital divide between rich and poor countries, we must also ensure that all countries can benefit from the latest innovations in digital money and payments, particularly remittances," Ms Georgieva said.
The biggest beneficiaries of adopting digital currencies in remittances would be vulnerable people sending small value amounts, the IMF chief said.
The IMF chief's comments came on the same day as Coinbase's debut on Wall Street on Wednesday, with the digital currency exchange's stock opening at $381, giving it a market value of $100 billion. The company's listing on a public stock exchange is seen by some as a watershed event for digital currencies.
Central banks across the world are also stepping up efforts to develop digital currencies to modernise financial systems, speed up payments and counter a possible threat from cryptocurrencies.
“Last October, The Bahamas launched the Sand Dollar, the world’s first central bank digital currency. Many other economies are exploring their pilot programmes,” Ms Georgieva said.
She added that other forms of digital money, such as privately issued stable coins, are increasingly being used for cross-border payments.
“New forms of digital money could provide a parallel boost to the vital lifelines that remittances provide to the poor and to developing economies,” Ms Georgieva said.
The right frameworks are required for peer-to-peer transfers of central bank digital currencies or privately-issued stable coins, which “could lead to shorter payment chains, faster transactions and more competition among remittance providers”, she added.
However, the adoption of digital currencies can present some risks, but they can be addressed in three ways, Ms Georgieva said.
“First, new forms of money must remain trustworthy. They must protect consumers, be safe and anchored in sound legal frameworks, and support financial integrity,” she said.
“Second, domestic economic and financial stability must be protected by carefully designed public-private partnerships that underpin the provision of digital money, including fair competition. Third, frameworks should be geared toward ensuring the international monetary system remains stable and efficient.”
The risk of a "growing digital divide" necessitates that all countries can benefit from the latest innovations in digital money and payments, Ms Georgieva said.
“With our mandate to safeguard monetary and financial stability, the IMF has an important role to play in supporting our members to deliver on these priorities, and we are ramping up our capacity,” she said.
The IMF will continue close collaboration with key stakeholders – including the Financial Stability Board, the Bank for International Settlements, the World Bank and industry players, Ms Georgieva added.
UAE currency: the story behind the money in your pockets
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
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Defending champions
World Series: South Africa
Women’s World Series: Australia
Gulf Men’s League: Dubai Exiles
Gulf Men’s Social: Mediclinic Barrelhouse Warriors
Gulf Vets: Jebel Ali Dragons Veterans
Gulf Women: Dubai Sports City Eagles
Gulf Under 19: British School Al Khubairat
Gulf Under 19 Girls: Dubai Exiles
UAE National Schools: Al Safa School
International Invitational: Speranza 22
International Vets: Joining Jack
TUESDAY'S ORDER OF PLAY
Centre Court
Starting at 2pm:
Elina Svitolina (UKR) [3] v Jennifer Brady (USA)
Anastasia Pavlyuchenkova (RUS) v Belinda Bencic (SUI [4]
Not before 7pm:
Sofia Kenin (USA) [5] v Elena Rybakina (KAZ)
Maria Sakkari (GRE) v Aryna Sabalenka (BLR) [7]
Court One
Starting at midday:
Karolina Muchova (CZE) v Katerina Siniakova (CZE)
Kristina Mladenovic (FRA) v Aliaksandra Sasnovich (BLR)
Veronika Kudermetova (RUS) v Dayana Yastermska (UKR)
Petra Martic (CRO) [8] v Su-Wei Hsieh (TPE)
Sorana Cirstea (ROU) v Anett Kontaveit (EST)
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The biog
Age: 59
From: Giza Governorate, Egypt
Family: A daughter, two sons and wife
Favourite tree: Ghaf
Runner up favourite tree: Frankincense
Favourite place on Sir Bani Yas Island: “I love all of Sir Bani Yas. Every spot of Sir Bani Yas, I love it.”
Virtual banks explained
What is a virtual bank?
The Hong Kong Monetary Authority defines it as a bank that delivers services through the internet or other electronic channels instead of physical branches. That means not only facilitating payments but accepting deposits and making loans, just like traditional ones. Other terms used interchangeably include digital or digital-only banks or neobanks. By contrast, so-called digital wallets or e-wallets such as Apple Pay, PayPal or Google Pay usually serve as intermediaries between a consumer’s traditional account or credit card and a merchant, usually via a smartphone or computer.
What’s the draw in Asia?
Hundreds of millions of people under-served by traditional institutions, for one thing. In China, India and elsewhere, digital wallets such as Alipay, WeChat Pay and Paytm have already become ubiquitous, offering millions of people an easy way to store and spend their money via mobile phone. Indonesia, Vietnam and the Philippines are also among the world’s biggest under-banked countries; together they have almost half a billion people.
Is Hong Kong short of banks?
No, but the city is among the most cash-reliant major economies, leaving room for newcomers to disrupt the entrenched industry. Ant Financial, an Alibaba Group Holding affiliate that runs Alipay and MYBank, and Tencent Holdings, the company behind WeBank and WeChat Pay, are among the owners of the eight ventures licensed to create virtual banks in Hong Kong, with operations expected to start as early as the end of the year.
Manchester City 4
Otamendi (52) Sterling (59) Stones (67) Brahim Diaz (81)
Real Madrid 1
Oscar (90)
The biog
Name: Samar Frost
Born: Abu Dhabi
Hobbies: Singing, music and socialising with friends
Favourite singer: Adele
