August 29, 2021

IMF considers bitcoin a private cryptocurrency with significant risks

IMF considers bitcoin a private cryptocurrency with significant risks

On Saturday, the International Monetary Fund mentioned crypto-assets on its Twitter, saying that they are privately issued, carry significant risks and are undesirable for use as legal tender.

Twitter also links to an IMF blog article written by two of the fund's legal advisers, titled "Cryptoassets as National Currency? It's Overkill." In the article, the authors warn about the risks associated with making bitcoin legal tender (a move the authorities in El Salvador took). One of the problems mentioned is the fact that a key leverage of monetary policy regulation in the form of the ability to set interest rates on foreign currencies is lost. 

Many people were shocked by such statements from the IMF and began to ridicule the fund for the fact that its experts managed to call bitcoin "private. Users point out that the IMF defends national currencies by criticizing bitcoin for allegedly being private, but in fact the asset is decentralized and has open source code, while fiat currencies, by contrast, are issued privately.

Some also point out that bitcoin and cryptocurrencies are competing with standard money for the role of international reserve asset, and that bitcoin is a direct competitor to Special Drawing Rights (SDRs). And DTAP Capital founder Dan Tapiero predicted the collapse of the IMF within 10 years.

Jack Evans

About the author

I became a crypto asset owner in 2014, when the industry was in its infancy. Before that, I was working in the classic US and European stock markets. Since then, I have gained extensive experience in both cryptocurrency investing and day trading. I am happy to share with readers my experience with crypto exchanges, DeFi and NFT instruments. 

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