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IMF staff proposes REDI framework to accelerate adoption of central bank digital currencies (CBDCs)
The staff of the International Monetary Fund (IMF) has presented a four-step framework to accelerate the global adoption of CBDCs. This framework is known as REDI, which includes regulation, education, design and incentives.
On September 21, the IMF published a report titled “Intermediary and User Strategies for the Adoption of Central Bank Digital Currencies.” The report recommends implementing inclusive strategies for intermediaries and end users, and introduces the REDI framework to promote CBDC adoption.
According to the IMF staff, successful adoption of CBDC requires strategic policy and design choices that will benefit end users and intermediaries. Therefore, central banks should prioritize stakeholder engagement.
The REDI framework includes regulation, education, design and incentives. The first step, regulation, involves policymakers exploring legal arrangements that will support the widespread adoption of CBDCs.
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The education phase suggests developing communication strategies to raise awareness. Central banks are expected to play the role of the main communication center in this process. In the third phase, it is stated that strategies targeting specific user groups and a wide intermediary network should be established.
As a final stage, IMF staff recommends implementing monetary and non-monetary incentives to encourage mass adoption of CBDCs. These suggestions include offering incentives for establishment costs, transaction fees and tax breaks.
The report also encourages further discussion on current concerns. In particular, it is stated that issues such as the sustainability of the CBDC system, ensuring the integrity of the system and maintaining the balance between adoption and financial stability should be examined further.
In August, two IMF managers stated that increasing energy costs by 85% globally in order to reduce the carbon emissions of crypto mining could have a significant impact.
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