The International Monetary Fund (IMF) has released a technical report on its opinion on Jordan’s CBDC development. According to the report submitted by the international body, the country is on the verge of creating its CBDC. The country contacted the IMF in 2022 to conduct a three-month study on its markets about the development of its CBDC.
The body commends the payment system in Jordan
According to the IMF report, the overall retail payment system of the country is considered one of the best in the world. The body noted that integration was one of the key features that made it stand out. The report pointed out that the country is benefiting from a surge in the usage of smartphones and the provision of payment products by two platforms that do not share a relationship with any financial institution.
However, the IMF report believes that a CBDC at this time will help the country push harder for inclusion. This way, people that do not own a smartphone would be able to enjoy the perks of using the CBDC. Asides from that, deploying a CBDC at this time could also help private payment systems as the framework will be accessible for them to build their projects on, which in turn reduces costs while providing speed for transfers across borders.
The IMF warns Jordan of hackers
The IMF report also clarified that Jordan’s payment system could do without disintermediation. This way, the country could eliminate the instability that arises when there is stress on the CBDC framework. The IMF also commended the level of sophisticated security deployed by Jordan, and the study found that hackers might start developing new ways to target the CBDC. Asides from that, the IMF advised that the country could also do with some legal framework to go with the creation of the CBDC. In its final remarks, the IMF clarified that the CBDC undoubtedly has some good benefits for residents in the country, but it has failed to seek redress for some problems.
In addition, the body noted that the value of the CBDC could increase if Jordan works with other neighboring countries. The body also fingered the literacy level and the use of cash as some of the few things the government must consider should they want a fully adopted CBDC. The premier bank in the country announced in 2022 that it had started looking into the possibility of creating a CBDC after it broke the news that crypto trading is allowed in the country. However, the push by the central bank to introduce and regulate the trading of digital assets has been met with stiff resistance from lawmakers.