Kristalina Georgieva, the head of the IMF, recently suggested that CBDCs could supplant physical cash. Speaking at the Singapore FinTech Festival, Georgieva urged central banks to focus on the advantages of these digital currencies and encouraged policymakers to delve into the possibilities surrounding CBDCs.

Her remarks echoed those of Christine Lagarde, her predecessor, and were delivered at one of the most prominent FinTech gatherings, the Singapore FinTech Festival, which attracted numerous industry experts.

Georgieva's endorsement of CBDCs on such a prestigious platform is likely to inspire central banks to explore their potential further. She emphasized the need for the public sector to begin laying the groundwork for CBDCs and related platforms in the years ahead.

Georgieva highlighted the rapid evolution of technology, citing ChatGPT's achievement of reaching 100 million users in just two months, a milestone that typically takes three years or more. She stressed the importance of readiness in the face of such rapid change.

While some countries, like the US, are already exploring CBDCs, Georgieva noted that there is still a long road ahead for central banks to make substantial progress. She referenced the Canadian central bank's acknowledgment of significant barriers to implementing a CBDC.

Georgieva further emphasized the potential of CBDCs to replace physical cash, particularly in island economies where distributing cash is costly. She suggested that CBDCs could enhance financial inclusion by reducing the need for traditional bank accounts, noting that over 60% of nations are considering CBDCs.

Additionally, Georgieva stressed the importance of central banks adopting an entrepreneurial mindset, emphasizing the need for incentives for integration, adoption, and innovation. She highlighted the significance of including cross-border payments in CBDC frameworks.