The Digital Currency Monetary Authority (DCMA) has officially launched an international central bank digital currency (CBDC) at the 2023 IMF Spring Meetings.
An international central bank digital currency (CBDC) has officially launched, according to the Digital Currency Monetary Authority (DCMA). At the 2023 International Monetary Fund (IMF) Spring Meetings, the DCMA, a membership organization of sovereign governments, central banks, commercial and retail banks, and other financial institutions, reaffirmed its aim to establish an international CBDC.
The launch of this offering is expected to increase the monetary sovereignty of the participating central banks while adhering to the most recent recommendations made by the IMF regarding the management of digital assets.
Unified Monetary System
The Universal Monetary Unit (UMU), represented by the ANSI character Ü, will operate legally as a money commodity capable of transacting in any legal tender settlement currency while acting as a CBDC to uphold banking laws and safeguard the soundness of the global financial system.
This will enable banks to link SWIFT codes and bank accounts to corresponding UMU digital currency wallets and conduct SWIFT-like cross-border transactions over digital currency rails. Bypassing the correspondent banking system entirely, this offers the greatest wholesale FX prices together with a quick, real-time settlement.
Cross-border transfers can be cumbersome, expensive, and hazardous, according to Tobias Adrian, an IMF financial adviser. To compensate for the lack of a common settlement asset as well as similar norms and governance, counterparties in various countries rely on expensive trusted relationships today.
But suppose there was a global platform that could enhance cross-border payments while also revolutionizing risk-sharing, foreign exchange transactions, and more broadly, financial contracts, Adrian writes in his conclusion.
A new direction for international payments
The executive director of the DCMA and the principal designer of UMU, Darrell Hubbard, claims that “This vision expressed by the IMF is the exact solution the DCMA is delivering to central banks worldwide.”
A worldwide localization public monetary system architecture allows UMU to comply with each country’s central banking laws.
George Walker is a partner at Practus LLP, and he specializes in international law. He organized meetings between the DMCA and the IMF. According to Walker, the IMF has not officially endorsed the Universal Monetary Unit (UMU). However, in weekly team discussions and after reviewing the DMCA’s whitepaper, the IMF has not stated any objections to UMU’s FX premium rates and its monetary sovereignty approach.
Hubbard asserts that UMU is not trying to undermine the global monetary system. In fact, it makes it stronger by assisting the IMF in fulfilling its declared goal of giving its member states economic and financial stability. UMU simplifies cross-border payments and safeguards against local currency devaluation.
Model law legislation for the issue of UMU has now been created in cooperation with numerous sovereign states.
The proposed law prohibits using UMU to negotiate domestic prices or overseas trade agreements. Instead, the legislation advocates using UMU as a store of value and payment currency at settlement to mitigate seasonal and systematic local currency devaluation.
Trade partners may accept UMU for the equal market value of their goods and services priced in any national legal money. UMU’s wallet’s premium exchange rates can convert any settlement currency amount to UMU.
UMU supports central banking and regulated financial institutions with a trusted consensus protocol, staked proof of trust (SPOT) protocol, and multi-dimensional DLT (mDLT) that supports any asset or liability ledger. This allows full-service digital banking and international commerce payments.
The DCMA calls UMU “crypto 2.0” because it uses new cryptographic technology to construct a digital currency public monetary system with a universal adoption framework that encompasses use cases for all constituencies in a global economy.