The IMF has warned that independent cryptocurrencies could destabilize traditional economic systems and has suggested countries digitize their own currencies instead to maintain control over money supply and regulation. Many central banks are now rushing to digitize their currencies after initially studying stablecoins, or digital currencies backed by traditional currencies, to gather more data on digital forms of money.

1. Digitized Currencies
Digitized Currencies

2. The IMF has warned that independent cryptocurrencies may destabilize regular
economic systems
They have suggested that countries digitize their own currencies in response
That way, they will retain control over money supply and be able to regulate their systems
A rush to do this has started at central banks across the world; but they are studying stablecoins to begin
with and planning to digitize their currencies after they have some more data
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IMF’s Warning

3. A Stablecoin is a form of digital money which is directly backed by a fiat currency.
A USD linked stable coin would be:
A digital token backed by USD
Solution: Currency Backed
Stablecoins
The USD amount would be held in a public sector bank account
Each token of this stablecoin could be redeemed for a single USD at this bank

4. A Stablecoin is digital money which is pegged to the value of a fiat currency such
as USD.
There are currently over 10 US Dollar linked Stablecoins (such as Tether).
The Stablecoin provider can hold the fiat currency reserve in a central bank, this way the
clients are protected from any Stablecoin issuer related risks.
Digital or Software wallets can be used to securely store and move stablecoin around.
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In Depth

5. Instantaneous transactions enabled by the underlying blockchain technology.
Distributed across multiple nodes, which means there isn’t a single point of failure
and greater reliability in the system.
Immutable because once transaction data is entered it cannot be edited or tweaked, it can
only be appended to.
Secured by complex cryptography, the transactions in this distributed and immutable ledger are tamper
resistant and therefore can be trusted.
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Properties

6. Minimizes the transaction fees: digital money transactions are done with
negligible fees.
Stablecoins make money programmable: the digital money can be programmed to follow
specific organizational logic and transactions can therefore be automated.
Smart Contracts can be implemented using StableCoins where transactions are triggered
only when specific external event occurs.
Thanks to the underlying blockchain technology all transactions are instantly auditable.
Benefits
Stablecoins offer several benefits:

7. IMF: The Rise of StableCoins
IMF: StableCoins to Central Bank Digital Currencies
JP Morgan’s USD Linked StableCoin
Resources
Tether’s USDT StableCoin
The Gemini Dollar StableCoin

8. Questions?