WASHINGTON—The Digital Currency Monetary Authority (DCMA) has announced the launch of an international central bank digital currency (CBDC). The announcement was made during the International Monetary Fund’s (IMF) Spring Meetings here.
According to Finextra, the DCMA’s Universal Monetary Unit (UMU) is legally a money commodity, that can transact in any legal tender settlement currency, and functions like a CBDC to enforce banking regulations and to protect the financial integrity of the international banking system.
“Banks can attach SWIFT Codes and bank accounts to a UMU digital currency wallet and transaction SWIFT-like cross-border payments over digital currency rails completely bypassing the correspondent banking system at best-priced wholesale FX rates and with instantaneous real-time settlement,” Finextra said.
‘Imagine’ This
Tobias Adrian, financial counselor at the International Monetary Fund, added, “Cross-border payments can be slow, expensive, and risky. In today’s world of payments, counterparties in different jurisdictions rely on costly trusted relationships to offset the lack of a common settlement asset together with common rules and governance. But imagine if a multilateral platform existed that could improve cross-border payments—at the same time transforming foreign exchange transactions, risk sharing, and more generally, financial contracting.”
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