IMF comments on CIP and urges cautious trial of digital currency

The International Monetary Fund (IMF) has published a Concluding Statement after it visited the Eastern Caribbean Currency Union for a regular mission.

The fund concluded that the Citizenship by Investment (CBI) program was one of the key reasons why the region has recorded a growth in the gross domestic product (GDP) last year.

However, the IMF anticipates the GDP growth to gradually slow to 2.5%. This coincides with a long-term historical average for the ECCU.

Also, CBI inflows might also slow. In the short-term, economic activity will be driven by tourism investment, some agricultural business projects, and further post-hurricane reconstruction.

In light of somewhat moderate projections, the IMF suggested the region to experiment with a common digital currency. The ECCU region is under the supervision of the Eastern Caribbean Central Bank (ECCB), which issues the Eastern Caribbean dollar.

IMF suggested that a digital currency underpinned by blockchain would boost the resources and capacity of the Eastern Caribbean Currency Union (ECCU), a region that comprises St Kitts and Nevis, St Lucia, Anguilla, Antigua, and Barbuda, Dominica, Grenada, and St Vincent and Grenadines.

Central Bank Digital Currency (CBDC) seems to be an unstoppable upcoming trend among major central banks. The Bank of England, European Central Bank, and Bank of Japan along with other counterparts, formed a group to study the benefits of CBDCs. Even the Fed admitted that it was thinking about adopting this innovation. IMF was among the first major institutions to forecast digital currency adoption by central banks.