"The push by central banks across the world to develop digital currencies could have some significant downsides as well, warns a new report by the International Monetary Fund (
IMF).
As central banks in Europe, China and the United States move closer to rolling out digital cash, the IMF cautions the move could lead to foreign currencies displacing local scripts, Reuters reported.
The adoption of digital currencies could also make it easier to “facilitate illicit flows” while also making it “harder for regulatory authorities to enforce exchange restrictions and capital flow management measures,” the report notes.
Roughly 80 percent of central banks in 66 countries, including 21 advanced nations, are exploring the issuance of digital currencies, while 40 percent have become pilot programs or experiments, including China, which just completed a major trial run."