The IMF recommends that central banks use green ways to create state cryptocurrencies

The International Monetary Fund (IMF) has published the results of its study titled Digital Currencies and Energy Consumption.

IMF analysts tried
show the importance of environmentally friendly ways to develop digital currencies, including central bank digital currencies (CBDC). Experts studied the energy consumption of crypto assets based on their individual elements in order to evaluate the ideal mechanism for developing digital currencies of the Central Bank.

First of all, the global financial institution recommends abandoning distributed ledger (DLT) applications that use the Proof-of-Work (PoW) consensus mechanism. This model of operation consumes a large amount of energy. The IMF cites the Bitcoin (BTC) network as an example, which, according to the authors of the study, consumes about 144 TWh per year.

At the same time, the organization noted high energy efficiency and assets that do not use PoW, surpassing even traditional financial systems. According to experts, energy savings contribute to reducing energy consumption both on the main processing architectures and on users’ means of payment.

The IMF recommends that central banks developing their own digital currencies have a clear goal of being environmentally friendly. This means choosing the right development platforms, hardware and design options with the lowest carbon footprint. To do this, central banks will have to move away from outdated systems tailored for traditional finance.

Earlier, IMF Managing Director Kristalina Georgieva called for the creation of a new public infrastructure for payment systems, including digital currencies. In her opinion, the international payment system needs modern equipment and new solutions.