The International Monetary Fund has revealed that artificial intelligence can enhance several benefits of the eNaira and other Central Bank digital currencies.
It mentioned that these benefits involve enhancing financial inclusion by providing fast and accurate credit scoring based on diverse data.
AI Can Enhance The Benefits of eNaira
The Washington-based lender suggests that the advantages of CBDCs will rely on the evolution of technologies.
IMF Managing Director, Kristalina Georgieva, shared this information in her keynote address at the Singapore Fintech Festival.
She mentioned, “AI, for instance, has the potential to enhance some of the benefits of CBDCs. It can enhance financial inclusion by delivering quick, precise credit scoring based on diverse data.
It can offer personalized assistance to individuals with low financial literacy. To ensure certainty, we must safeguard personal privacy and data security, steer clear of embedded biases to avoid perpetuating inequality, and strive to diminish it. If handled wisely, AI has the potential to be beneficial.
She further mentioned that the tokenization of financial assets, like bonds issued on blockchains, will open another avenue for CBDC, potentially in a wholesale form, to be used for these assets’ payments.
Georgieva’s Insights on CBDC Advantages and Future Prospects,Navigating Payment Environment Dynamics
Georgieva emphasized that the advantages of CBDCs would arise from developments in the payment environment. This depends on how many other countries embrace CBDCs and to what extent cash becomes obsolete.
She asserted that numerous countries are exploring CBDCs and establishing regulations to steer the development of digital money.
However, she pointed out that there’s still much work to be done, and there’s ample room for innovation due to the considerable uncertainty surrounding use-cases for CBDCs.
She stated that the public sector should continue preparing to deploy CBDCs and related payment platforms in the future.
Highlighting the factors on which the success of CBDCs hinges, the IMF MD stated, “The success of CBDCs will depend on policy decisions and the private sector’s response. The actions of many of you here today will be significant. Country authorities aiming to introduce CBDCs may need to adopt a more entrepreneurial mindset.
Communication strategies and incentives for distribution, integration, and adoption are just as crucial as design considerations,” she emphasized. Additionally, she announced the launch of a CBDC Handbook by the IMF, highlighting its purpose to gather and disseminate knowledge on CBDCs for policymakers globally.
