A synthetic central bank digital currency (sCBDC) based on public-private partnerships is better than a fully functional CBDC. It was said by the International Monetary Fund.
Tobias Adrian, director of the IMF's currency control and capital market department, and Tommaso Mancini-Griffoli, deputy department head, described the benefits of the sCBDC model on a blog. It intends to leave the issue and support of stable digital currencies to private issuers, and the Central Bank will protect the assets of their customers.
IMF officials warned that the launch of the CBDC would require central banks to participate in many stages of the payment chain. This can be costly and risky for the Central Bank, as they fall into an unfamiliar territory of brand management, application development, technology choice, and customer interaction.
As a result of public-private partnerships within the sCBDC model, central banks will focus on their core functions supervision, confidence, and efficiency. The private sector will engage in innovation and work with clients, which can do much better than the Central Bank, IMF managers emphasized.
According to them, if central banks are considering digital alternatives to cash, then sCBDC is a “potentially attractive option” for them.
Adrian and Mancini Griffoli are considering whether sCBDC will become the money of the central bank of the future. They are talking about one thing for sure: the world of fiat currencies is constantly changing, and innovation will transform the banking sector and money. You can bet on that last dollar.