The IMF has not launched its own Central Banking Digital Currency

Several posts online have claimed that the International Monetary Fund (IMF) has created a Central Banking Digital Currency (CBDC) called Unicoin.

Although a cryptocurrency called Unicoin exists, it was not created by the IMF.

In our fact checking online misinformation, we often see posts concerned about the potential creation of a CBDC, due to concerns over privacy and the potential for restriction and the effects on small businesses if it ever replaced other types of payments, such as cash. The Bank of England has said it’s looking at the case for a digital pound or CBDC but that “it would not replace cash”.

We have written about perceived changes to the use of cash before, including about false claims that Sweden is abolishing it, that the WHO advised people to use contactless payments because of Covid-19 and that Starbucks was going cashless in the UK.

While several campaigns exist to promote the use of cash, to protect those who don’t have bank accounts, live in isolated communities or on tight budgets, false claims about the demise of cash risk causing unnecessarily alarm.

What is Unicoin?

Unicoin, also called “Universal Monetary Unit”, is described on its website as both an “international CBDC” and a cryptocurrency.

A Central Banking Digital Currency, or CBDC, is generally understood to refer to a digital currency issued by a country’s central bank. A cryptocurrency is usually a decentralised digital or virtual means of financial exchange, the best-known of which is Bitcoin. 

A press release for Unicoin says it is “legally a money commodity, can transact in any legal tender settlement currency, and functions like a CBDC to enforce banking regulations and to protect the financial integrity of the international banking system”. It is not issued by a country’s central bank. 

Online publication CryptoSlate reports that Unicoin “is more accurately described as a private stablecoin than a CBDC”. Stablecoins are cryptocurrencies whose value is tied to another, usually more stable, currency.

DCMA, a company called the Digital Currency Monetary Authority which created Unicoin, told Full Fact: “The definition of a central bank digital currency does not mean it must be literally backed by a central bank. Many private banks have issued their own coins and called it a CBDC. The meaning of CBDC has evolved in the industry from its initial inception.”

They added: “What we have launched is an ‘International CBDC.’ International is the operative word! Because there is no international / global central bank, legally, our coin is considered a ‘money commodity.’ However, it still functions as a CBDC for each central bank that adopts it.”

Perhaps adding to the confusion, the press release quoted a financial counsellor at the IMF, though he isn’t actually talking about Unicoin. Later in the release it is clarified that the IMF has “not officially endorsed Universal Monetary Unit”.

What is the IMF?

The IMF has 190 member countries for which it “works to achieve sustainable growth and prosperity” by “supporting economic policies that promote financial stability and monetary cooperation”. It does this by issuing loans to countries, providing technical assistance and collecting and publishing data on the world’s economies. It is not the same thing as the World Bank, although both are “specialised agencies” of the United Nations.

CryptoSlate reported that the IMF said it had no involvement in Unicoin. The IMF told Full Fact: “The DCMA is not affiliated with the IMF.”

DCMA told Full Fact that the IMF was not involved in the launch of Unicoin, but that the IMF “invited the DCMA to participate in the INVITATION ONLY IMF Spring Meetings 2023. We decided to leverage that opportunity to announce our launch at the event”.

However, an IMF spokesperson also told Full Fact: “The Unicoin wasn’t introduced at the IMF Spring Meetings. The launch happened to coincide during the week of the IMF Spring Meetings.”

CryptoSlate reported that the IMF said in a statement: “The IMF has no involvement in the DCMA or Unicoin.”

One Instagram post includes a screenshot of an article that claims: “IMF Unveils New Global Currency Known As The ‘Universal Monetary Unit’ To ‘Transform’ World Economy”. That article goes on to say the IMF didn’t create the currency, as do others with similar headlines, but that part isn’t in the Instagram screenshot.

One article that previously said the IMF had “unveiled” Unicoin has been updated to say it was unveiled at the IMF spring meetings.

So who did create Unicoin? 

The press release names the DCMA as the creator. 

Despite its name, the DCMA is not a government body. Its website says it is “a world leader in the advocacy of digital currency innovations for monetary authorities” and the Unicoin press release states it has membership consisting of “sovereign states, central banks, commercial and retail banks, and other financial institutions”.

Image courtesy of Kanchanara