The International Monetary Fund (IMF) acknowledges the potential of digital currencies to address unique currency needs in Pacific Island countries (PICs) but warns against unbacked cryptocurrencies as national currencies.

PICs face challenges such as small markets, dependency on remittances, and vulnerability to banking service reductions due to global Anti-Money Laundering standards.

While digital currencies offer promise, the IMF emphasizes careful design and gradual introduction to modernise financial systems without exposing PICs to new risks.

This approach aims to enhance economic inclusion and services in PICs while mitigating potential downsides of unregulated digital currencies.