The International Monetary Fund finally opens up on its concerns regarding El Salvador’s step to accept bitcoins as legal tender. There is not much swept under the carpet here. El Salvador’s decision was appreciated by the crypto community all across the globe. This announcement from El Salvador is the most significant one in the history of the crypto market. But it was obvious that it could not go unnoticed.
In a recent announcement International Monetary Fund, a global development bank closely working with the world’s richest countries, quickly reacted that this move raised eyebrows of “multiple macroeconomic, financial and legal regulatory authorities.” This statement by IMF is concealed threat for El Salvador because El Salvador is holding discussions with IMF authorities over the $1 billion loan. However, it can be deemed that this loan grant might be delayed or canceled by the IMF authorities. IMF authorities showed their concerns and explained that it is difficult for them to ignore all the concerns raised by other countries over El Salvador’s recent step.
IMF hinted that they need to look at the broader picture before maturing its loan deal. IMF posted a recent blog titled “Crypto-assets as National Currency? A Step Too Far.” IMF cited the concerns of other countries as their primary concern. Accepting crypto assets as the national currency posed serious threats to the world’s financial regulations.
In reasonableness, it was a casual blog entry implied for a wide crowd. However, the absence of nuance from an element that has gigantic influence over the prosperity of a considerable lot of the world’s most weak individuals is frustrating, if not through and through terrifying. Apparently to support the feeling that the IMF’s issue with Bitcoinization is less about the strength of economies setting out to advance than about keeping up with the IMF’s own situation of control over them.
On the other hand, experts said that this blog post was not a threat, but it pointed out El Salvador’s decision. However, IMF touched on certain points as a matter of concern. One of the biggest concerns is the volatile nature of crypto assets which makes them unfit for long-term monetary policymaking and debt-related operations. A volatile currency cannot be accepted as a national currency for trade. The decision takes by El Salvador can isolate the country from the rest of the world. Even for a shorter period of time cryptocurrency will massively disrupt economic activities.
The blog raised the point crypto can be deemed as a trading entity that can be protected by regulatory authorities. But using it as a national currency will disturb the paradigm of how countries economically coexist with each other. This will also have a catastrophic impact on the world’s banking system. The whole argument seemed pretty rational to all.
