Digitalization can lead to ‘financial inclusion’, IMF director urges
As Kristalina Georgieva of the IMF points out, digitization is the most effective way to expand financial inclusion.
With digital, people are receiving help, investments are being made, and the ability of the economy to accelerate has been enhanced, Georgieva told a gathering in Togo during the COVID-19 pandemic during which digital cash transfers were established. Her call for comprehensive national strategies for financial inclusion was echoed by the audience; however, she reminded them that digitalization is often accompanied by financial stability risks, which can pose a threat to financial stability.
Recently, the IMF has been active in analyzing crypto regulations that are necessary and has been studying them. A crypto-risk assessment matrix (C-RAM) was proposed on Sept. 29 by the agency in order to help countries identify indicators and triggers that could indicate potential risks in this sector during the coming months.
The IMF’s Synthesis document – which was jointly prepared with the Bank for International Settlements (BIS) – has been adopted unanimously by the “Communique of G20 Finance Ministers and Central Bank Governors” published in October.
As opposed to imposing a blanket ban, the paper advocates for a comprehensive oversight of crypto rather than a blanket ban. As part of its high-level recommendations, the report calls for cross-border cooperation and information sharing between regulators, a demand for comprehensive governance frameworks and risk management frameworks for crypto companies, as well as the assurance that authorities will always have access to the relevant data provided by companies.