Central banks should consider issuing digital currencies as money faces a "historic turning point," according to IMF Managing Director Christine Lagarde.
In a speech at the Singapore Fintech Festival on Wednesday, Lagarde highlighted the changing nature of money as demand for physical cash decreases around the world. She said central banks have a role supplying money to the digital economy.
"I believe that we should consider the possibility to issue digital currency," Lagarde said.
Lagarde said a central bank-backed digital currency could help promote financial inclusion, security, and privacy in payments as a low-cost and efficient alternative to paper notes. But she also warned of risks to financial stability and innovation.