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The International Monetary Fund (IMF) seems to be in panic mode as it consistently opposes cryptocurrencies. It is insistent on the protection and value of sovereign fiat currencies over digital assets. But what about inclusivity, one can ponder.
In a recent blog post, the IMF called upon countries to guard the authenticity of their monetary systems to inhibit them from being usurped by digital currencies. The blog post states, “The defense against the substitution of sovereign currencies is the maintenance of robust, trusted, and credible domestic institutions. Transparent, consistent, and coherent monetary policy frameworks are crucial for an effective response to the challenges posed by crypto assets.”
The IMF, therefore, believes that countries should refrain from granting cryptocurrencies the status of legal tender. The post warned, “To protect national sovereignty, it is important not to grant crypto assets official currency or legal tender status. Doing so could generate fiscal risks for government finances, and could threaten financial stability or rapid inflation.” It didn’t however go deep into the success story of El Salvador where the adoption of Bitcoin has the country’s economy thriving.
Acting as a global bank, the IMF offers financial support to nations in distress. Apart from providing financial aid, it also counsels countries on strategies to boost their economies.
This isn’t the first time the IMF has expressed its concerns about cryptocurrencies, especially regarding taxation. Earlier this month, the IMF suggested that worldwide tax structures need to be updated to include digital currencies. It mentioned, “Crypto transactions have similarities to those in cash in their potential for being hidden from tax administrations. This may be the biggest threat from crypto.”
How sincere the IMF is in its concerns, and whether it genuinely has the global populace’s interests at heart, are questions worth pondering. Among many, cryptocurrencies such as Bitcoin in particular, with a global adoption will help the unbanked and promotes inclusivity for those previously unable to open bank accounts.