Digital Public Goods Charter (DPG Charter)

DPG Charter is an organizing framework for mobilizing finance, action, and advocacy to advance the use of digital public goods. The Charter endorses the Global Public Goods Alliance (DPGA) definition of  Digital public goods as  “open-source software, open data, open AI models, open standards, and open content that adhere to privacy and other applicable laws and best practices, do no harm by design, and help attain the Sustainable Development Goals (SDGs). Managed by the Digital Public Goods Alliance and the Digital Impact Alliance (DIAL) the Charter and the growing movement around DPG is intended to challenge the status quo in the delivery of digitalization with the objectives of advancing inclusion, enabling local and national solutions, and promoting cross-border collaboration. The event on The Future of Digital Cooperation: Building resilience through safe, trusted, and inclusive digital public infrastructure was “the first major gathering of countries at the UNGA to advance common approaches to building digital public infrastructure.” This is a good place to start for understanding the global effort on this agenda, the level of support and mobilization, future milestones, and opportunities for engagement

New Economy Forum: Transforming Fiscal Policy Through Digital Public Infrastructure

Bringing together Lucy Harris, the co-lead of the Digital Public Goods Alliance, and Pramod Varma, the chief architect of Aadhaar and other parts of the India Stack, with leading staff of the IMF Fiscal Affairs Department to debate the role of digital public infrastructure in the transformation of digital finance including building blocks such as digital ID, e-payments, and data sharing solutions. Mr. Pramod’s explains digital public infrastructure as publicly built digital infrastructure as opposed to private. He also clarifies the benefits of the public nature in terms of interoperability of systems, portability of data, and sovereign control. This understanding was shared by Ms. Harris who highlighted in particular the issues of vendor lock-in and risk of market monopoly. She advocated for digital public goods to mitigate this risk ensure country sovereignty and control over DPIs systems. The session also shows that the IMF is positioned as a provider of advice in this space linking both the cross-country knowledge of digitalization effort and IMF expertise on public finance including developing cost estimators of DPI projects.

New economy forum: beyond CBDC — fast payments as a competitor or model?

This session debates the relative value of two new foundational types of payments infrastructure: fast payments and CBDC. Piero Cipollone, Deputy Governor of the Bank of Italy and Sopnendu Mohanty, Chief Fintech Officer at the Monetary Authority of Singapore compare and contrasted the fast payments experience in Europe and Singapore shedding light on the operation of fast payment and the space that it leaves for CBDC innovation in the future. The session provides good insights on cost and pricing of payments in different contexts, the public good of standardization, reducing the cost of cross-border payment, CBDC interoperability, and asset tokenization. While Mr. Cipollone advocated strongly for solving today’s problems using today’s solutions while innovating, testing, and evaluating implications of CBDC, Mr. Mohanty advocated for choice in payment through sequenced innovation: asset tokenization and tokenized asset market then digital currency. Through an intervention from the floor, Cecilia Skingsley, Director of the BIS Innovation Hub provides insight on how Project Nexus aims to lower the cost of cross-border payment by connecting real time payment systems. She stressed however that “while technology can take us part of the way but the real challenging thing is to agree on governance, rule books, make sure the ecosystem is onboarding this, dispute resolution and the like.” Positioning the role of central banks in payments innovation, she added: “we need to push the private sector into new equilibrium, we are at this stage in payments.”

IMF seminar: CBDCs for financial inclusion — risks and rewards

Financial inclusion is often offered as the rationale for introducing CBDC. This seminar brought centrals banks and international organizations perspective to examine the validity of CBDC’s potential to address financial inclusion. The message was consistent- CBDC has potential because of its legal tender, programmability, competition enhancing features but only if it was properly designed. The panel went ahead to debate how this potential can materialize. Few insights stand out: payments is only one step and financial inclusion depends on financial sector intermediation offering saving and insurance products, CBDC design should mitigate the risk of disintermediation (Queen Maxima), Successful CBDC system has to be built on Public Private Partnership (Bo Li, IMF Deputy Managing Director), CBDC needs to be part of a package of policies to address hurdles to financial inclusion (Cecilia Skingsley, Head of the BIS Innovation Hub), and there are demand side barriers to financial inclusion such as preference for cash that CBDC design need to address to solve for financial exclusion (Kristalina Georgieva, IMF Managing Director). The jury is still out. It is an if but, as as Queen Maxima said in her opening remarks, it is a big if. You can watch the entire event here.

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