Author: Jai Hamid, Cryptopolitan; Translation: Song Xue, LianGuai
TL;DR
The International Monetary Fund strongly opposes granting cryptocurrency the status of “official currency or legal tender”.
The organization is concerned about the impact of cryptocurrency on government finances and potential rapid inflation.
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It emphasizes the need for strict regulation and comprehensive cryptocurrency policies.
Cryptocurrency has caused waves in the global economy, and it is safe to say that the International Monetary Fund (IMF) is on shaky ground. As the world gets deeper into the cryptocurrency rabbit hole, the IMF believes it is time to hit the brakes.
Why is the International Monetary Fund so afraid of cryptocurrency?
The IMF’s latest position highlights the harsh reality it sees in the cryptocurrency field. It asserts that cryptocurrency should not be granted the status of “official currency or legal tender”.
The IMF believes that the idea of global economic entities accepting digital assets for taxation, fines, and debt settlement is a minefield full of fiscal risks and potential damage to government finances.
You may wonder why the International Monetary Fund is so rigid. This is because there are valid concerns about the possibility of uncontrollable rapid inflation. In fact, the increasing acceptance of cryptocurrency in daily life may pose an undeniable threat to financial stability.
The IMF is also increasingly concerned about the growing integration of cryptocurrency in the global economy. This is not entirely unfounded. The failures of cryptocurrency exchanges such as Terra clearly remind people that without proper policies, financial chaos may ensue.
The organization believes that taking a more comprehensive and in-depth approach to cryptocurrency is crucial. This will ensure the protection of monetary sovereignty, investor interests, and financial stability.
The International Monetary Fund states that the current situation is unsustainable; what we need are robust regulatory measures to curb the growing influence of cryptocurrency.
Cryptocurrency policies
The International Monetary Fund appreciates the efforts of some policymakers but believes that more work needs to be done, especially in implementing global standards.
A quick look at the failures of the FTX cryptocurrency trading platform and Terra Luna stablecoin last year clearly demonstrates the urgent need for more explicit policies to protect investors and prevent abuse.
The International Monetary Fund insists on comprehensive, consistent, and coordinated policy guidelines. This is particularly important for emerging markets and developing economies, as the impact of cryptocurrency assets can be far-reaching.
In order to address this issue, the International Monetary Fund (IMF) earlier this year submitted a detailed assessment of the macroeconomic impact of cryptocurrencies to the G20 presidency. These recommendations follow the principles of a solid macroeconomic policy foundation, clear legal treatment, effective implementation, and detailed rules.
The IMF’s strategy consists of three key pillars:
1. Opposing the use of cryptocurrencies to replace sovereign currencies. This includes maintaining strong and reliable domestic institutions and a consistent monetary policy framework.
2. Not granting cryptocurrencies official currency or legal tender status. It believes that this is crucial for maintaining national sovereignty, preventing potential fiscal risks, and rapid inflation.
3. Integrating cryptocurrencies correctly into existing systems and rules to manage capital flows. The IMF states that this will help ensure stability and minimize potential disruptions.
The organization’s apparent concern about the potential harm that cryptocurrencies could cause to the global economy is evident, and its call for immediate action is louder than ever before.
As we venture into the unknown territory of digital currencies, one thing is clear – the International Monetary Fund will not stand idly by. It is time for everyone to take notice.
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