The International Monetary Fund (IMF) has issued recommendations to its member states on the policy to adopt regarding cryptocurrencies. According to the institution, crypto-assets have not yet seen their advantages manifest themselves.
IMF gives guidance on how to deal with cryptocurrencies
This week, the International Monetary Fund (IMF) published a list of recommendations, in which it makes recommendations to member states on how they should guide their policy towards cryptocurrencies.
Unsurprisingly, the tone of this press release is focused on skepticism towards our ecosystem. Through nine key points, the IMF for example, dissuades states from adopting cryptocurrencies as their official currencyor to give them legal tender, so as to “preserve sovereignty and monetary stability“.
There “excessive volatility of capital flowsis also singled out. If volatility is a reality, it will nevertheless be interesting to recall that no currency is stable. Indeed, the EUR/USD pair, for example, went from 1.22 dollars in May 2021 to 0.953 last September, to navigate around 1.059 today.
From this postulate, while in 10 years Bitcoin (BTC) rose from $20 to $23,900it may be interesting to adopt the opposite point of view and to consider that the dollar lost 99.93% of its value against BTC.
In addition, the IMF encourages governments to cooperate, so as to “improving oversight and enforcement» cryptocurrencies. States are also encouraged todevelop digital infrastructures and alternative solutionsin terms of cross-border payments.
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Benefits that have not yet manifested
Amid its various recommendations, the International Monetary Fund believes that the benefits of cryptocurrencies have not yet been demonstratedconversely to risks:
“Directors have generally observed that while the supposed potential benefits of crypto-assets have not yet materialized, significant risks have emerged. These include macroeconomic risks, which include risks to the effectiveness of monetary policy, volatility of capital flows and fiscal risks. »
However, it should be remembered that it is not enough to look at our ecosystem with the point of view of a Westerner living in a developed country and without armed conflict on its soilto judge the usefulness or otherwise of cryptocurrencies.
From the beginning of the war in Ukraine, the invaded country received millions of dollars in donations via various blockchains. On the other hand, through initiatives like Machankura, it is possible to send Bitcoin without an Internet connection, to unbanked areas of Africa.
Moreover, banking crises like the one in Lebanon show how necessary it can be to be really owns his moneywhile inflation of 64.3% last January in Turkey proves that a monetary policy can fail to keep its promises.
Despite these few examples proving indeed the usefulness of cryptocurrencies, the position of the IMF can be understood given that the very foundation of Bitcoin, for example, is placed precisely contrary to the principles of this institution.
👉 On the same subject – Salvador: the IMF is still wary of Bitcoin, but seems to soften its speech slightly
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Source: IMF
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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