IMF Releases Digital Currency Handbook for World's Central Banks

The IMF’s “Central Bank Digital Currency Virtual Handbook” published last week pointed out that the increased use of CBDCs can “reduce dollarization” of the global economy.

  • “De-dollarization” is a situation where countries move away from relying on the U.S. dollar as a reserve currency.
  • De-dollarization would push up borrowing costs in the United States, making loans expensive for businesses and individuals, thus affecting economic growth.
  • In addition to de-dollarization, a CBDC “could increase risks of flight to safety from retail bank deposits in periods of market stress.”

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