- UMU launched at IMF Spring Meetings 2023, aiming to bolster monetary sovereignty.
- Banks can use UMU to securely connect SWIFT Codes and accounts to digital wallets for real-time cross-border payments.
- UMU features innovative cryptographic technologies, including the Staked Proof of Trust (SPOT) Protocol and AI-powered central banking monetary policy framework.
The International Monetary Fund (IMF) and the Digital Currency Monetary Authority (DCMA) announced the launch of the Universal Monetary Unit (UMU) during the IMF Spring Meetings 2023. Also referred to as Unicoin, the central bank digital currency (CBDC) aims to bolster monetary sovereignty while adhering to the IMF’s recent crypto asset policy recommendations.
Tobias Adrian, Financial Counsellor at the IMF, emphasized the need for a multilateral platform to improve cross-border transactions, stating that such a platform could “transform foreign exchange transactions, risk sharing, and financial contracting.”
Per the DCMA, the Universal Monetary Unit (UMU) seeks to offer a legally recognized money commodity that can be transacted in any legal tender settlement currency. Symbolized by the ANSI character Ü, the UMU operates like a CBDC, enforcing banking regulations and protecting the financial integrity of the international banking system. It also enables banks to securely connect SWIFT Codes and accounts to a digital wallet, facilitating real-time cross-border payments.
The UMU operates using the Staked Proof of Trust (SPOT) Protocol, a multi-dimensional Distributed Ledger Technology (mDLT), and an Artificial Intelligence (AI)-powered central banking monetary policy framework. The DCMA introduced the UMU as “Crypto 2.0,” emphasizing its potential for broad adoption in the global economy.
Darrell Hubbard, the Executive Director of the DCMA and the chief architect of the UMU, confirmed that the UMU aims to provide central banks worldwide with the precise solution that the IMF envisions. The global localization public monetary system architecture of the UMU allows it to operate according to the central banking regulations of each participating jurisdiction.
Although the IMF has not officially endorsed the UMU, George Walker, a Partner at Practus, LLP, noted that the organization had not raised objections to its foreign exchange premium rates or its monetary sovereignty approach.
Furthermore, the UMU Model Law legislation, developed in collaboration with several sovereign states, proposes the UMU be enacted as a complementary money commodity for the store of value. It aims to mitigate potential seasonal and systemic local currency depreciation and serve as a payment currency at the time of settlement.