Digital Money Can Facilitate Remittances – IMF

Kristalina Georgieva, Managing Director, International Monetary Fund (IMF) says the world is witnessing a revolution in digital money that can make remittances easier, faster and cheaper.

She said this on Wednesday in Washington, D.C. during her opening remarks at the iLab Spring Meetings Virtual Workshop.

According to her, after a long period of development, the field is on the edge of major changes that have the potential to reshape cross-border payments and remittances.

She added that new forms of digital money could provide a parallel boost to the vital lifelines that remittances provided to the poor and to developing economies.

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Also, within the right framework, peer-to-peer transfers of central bank digital currencies or privately issued stablecoins could lead to shorter payment chains, faster transactions, and more competition among remittance providers.

Georgieva said remittances had always played a key role in improving the lives of people in developing economies and supporting economic activity.

She added that the biggest beneficiaries would be vulnerable people sending small value remittances; those most at risk from being left behind by the pandemic.

“As we look for ways to address the challenges of economic divergences across countries, 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,” she said.

She, however, said efforts were underway to improve cross-border payment systems under the Financial Stability Board’s 2020 roadmap.