Speaking at the Singapore Fintech Festival that is taking place all of this week, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) outlined her expectations for payments in our digital age.
Georgieva highlighted the four cornerstones of digital payments – a sector of Fintech that has grown exponentially in recent years. She says the four are; Private-sector innovation, Public-sector involvement, Regulatory and legal frameworks, and International cooperation.
While noting that digital currency may emerge, Georgieva says its function should not change. “It should still anchor the stability of other forms of money, while enabling their evolution and diversity.”
Georgieva says the private sector is best positioned to gauge the needs of people and provide the services they want.
The public sector must provide verifiable digital identification, communications infrastructure, central bank money, and other necessities.
Regarding regulations, not only do they need to be fair but they must be clear, creating a level playing field for market entrants. International cooperation should be self-evident as transfers frequently occur in multiple jurisdictions and fragmentation of rules can cause unnecessary friction and increased cost for users.
As well, there is always the potential for risk as digital money may impact the global monetary system.
The goal is to enable a system that is more inclusive and robust without creating unnecessary problems. In summation, Georgieva notes that “If your dreams do not scare you, they are not big enough.”