So let’s talk IMF and Ripple for a second. For about a year now maybe two, we have seen the IMF alongside Ripple in images blasted all over the internet. We have seen the managing director and chairwoman of the Internation Monetary Fund praise Ripple and what Ripple is trying to accomplish with the digital asset XRP over and over again. But why? There has to be a purpose. Is the IMF going to create the “IMF Coin” and are just using XRP as an example? Unlikely. So what is really going on between Ripple and the IMF? Let’s dig in a little deeper.
Couple months back at the Paris Fintech Festival, Christine Lagarde warned banks that they need to act and adapt to new technologies to better serve their customers. Christine Lagarde said:
“I think in the banking system at large in many, many countries, the difference will not be between those who are disrupted and those who survive. The difference will be between those who are cannibalized because they’re not seeing it coming, and they’re not embracing it, and those who self-induce that cannibalization. And I’m using cannibalization on purpose because it’s a bit of a striking, horrible word. But it’s really what it means. You’re going to disrupt your business model. You’re going to change it. You’re going to reduce your costs. You’re going to expedite your transactions, and you’re going to inspire confidence because you will build out on the basis of an existing backbone, which is your bank and the confidence, relationship you’ve established with your customers.”
So what would have to happen for the IMF to get involved in digital assets? Well, it’s simple actually. A country or central bank would have to hold a digital currency or issue a digital currency. We have read that the BOJ (bank of Japan), Singapore, and Iran were all moving towards a digital currency. This would position the IMF to step in as well. This would force the IMF to find a way to support these countries and this new form of e-money. Once enough countries convert to CBDC, then XRP will become a reserve asset and then the IMF will step in.
The Bank of Japan (BoJ) has published a new report that looks into the concept of central bank digital currencies (CBDCs).
The report, titled “Digital Innovation, Data Revolution and Central Bank Digital Currency,” states that CBDCs can be categorized into two types – one, used by general public in place of bank notes, and the other for large-value settlements, which are based on central bank deposits and adopt new technologies such as distributed ledger technology (DLT).
“This paper will focus mainly on CBDC in the former ((a)) category [CBDCs used by general public] and their relevant issues, unless otherwise noted,” the report states.
The launch of the state cryptocurrency was announced on January 29 during the annual conference on electronic banking and payment systems in Tehran. The theme of the conference this year was the “Blockchain revolution”.
The Monetary Authority of Singapore (MAS) will soon test how it could issue digital currency using a blockchain-based interbank payment system.
Here is the icing on the cake: We believe the deal between Ripple and the IMF is done: Does this remind you of a picture you take with your team when a project has been completed?