IMF says crypto is not fit to become legal tender; Are they right or wrong?

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The International Monetary Fund has taken a bold stand on crypto, the increasingly popular alternative currency that it is not fit to become legal or official national currency, after the announcement of El Salvador’s bitcoin.

What does this mean for the future of the currency, and does the IMF’s experience in Latin America add the necessary context to their announcement?

Let’s discuss it.

This opinion came in the context of a blog post titled Cryptoassets as National Currency? A Step Too Far, written by Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, and Rhoda Weeks-Brown, Director of the IMF’s Legal Department.

In summary, they said, as the national currency, crypto-assets, including Bitcoin, pose substantial risks to macro-financial stability, financial integrity, consumer protection and the environment.

The international group argues that there are various reasons why cryptocurrency is not ideal as legal tender, including:

Homes and businesses would waste time trying to figure out what types of money to hold and process. more exposure to fraud Although it clearly comes from one side of the issue, it is true that monetary policy like the one implemented by the IMF would lose its bite, as central banks cannot fix interest rates on a foreign currency

This blog post to date would only apply to a handful of countries, primarily El Salvador, which has made bitcoin legal tender in their dollarized economy in the United States, and Venezuela, which has a supported cryptocurrency. by the state, the petro, to fight against hyperinflation. Hosts Daniel Litwin, Tyler Kern and Taylor Bagley add context on the history of the IMF in providing loans to struggling economies, including El Salvador during the COVID pandemic, and how these loan terms set the policy. austerity on struggling economies.

Considering all of these things, is the future of embedded crypto as bright as it looks or poised to go off the rails? Hash It Out hosts sit down with guest Mauricio Di Bartolomeo, co-founder and CSO of Ledn.io, a digital platform that allows cryptocurrency holders to access loans and accounts Bitcoin-backed savings plans that earn interest, to discuss.

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