IMF examines CBDC design in context of Islamic banking, finds some dangers magnified

A central financial institution digital foreign money can influence financial coverage by rising cash velocity, disintermediation, volatility of financial institution reserves, foreign money substitution and altered capital flows, even when it isn’t designed to take action, in line with a research printed by the Worldwide Financial Fund. The unintended influence of a CBDC could also be felt notably acute within the Islamic banking system.

The Islamic monetary system accounts for lower than 2% of world finance, however it’s current in 34 nations and systemically vital in 15 jurisdictions. Solely two nations, Iran and Sudan, have absolutely Islamic banking methods. Ten nations with an Islamic monetary presence, together with Iran, are at present contemplating CBDCs, in line with the paper.

Proceed Studying on Coin Telegraph