IMF: The new trend of digital yuan is technically pragmatic, not needing either

On February 10, the International Monetary Fund (IMF) released a report on central bank digital currencies, which studied CBDC projects in six countries, saying that there is no universal design or method to implement CBDC.

CBDCs are still in their infancy, and there are still unanswered questions as well as common roadblocks.

Open issues raised by several jurisdictions included the nature of a sustainable business model that would ensure cost recovery and provide adequate incentives for private sector participation. Other issues relate to pushing the boundaries of innovation to allow for important functions such as offline capabilities. The choice of technology is also often highlighted, including the use cases and limitations of DLT. Key difficulties ahead include making choices in a very new and rapidly developing field, and the costs associated with the development process.

A new trend in some jurisdictions, led by the People's Bank of China, is a pragmatic view of technology. The choice between centralized and distributed technologies does not need to be either. Central banks can adopt CBDC, using different technologies for different purposes.

There are still some unanswered questions, and CBDC remains uncharted territory, presenting both challenges and opportunities. Enhanced international information sharing, sharing of insights gained from individual CBDC projects, and collaboration on policy and design issues will be an important future work.