The IMF Warns Countries Not to Make Crypto Legal Tender
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The International Monetary Fund—IMF for short—has been one of the most vocal traditional finance organizations speaking out against Bitcoin. According to managing director Kristalina Georgieva, he IMF is ‘very much in favor’ of regulating digital finance, but the priority is to prevent countries from making Bitcoin legal tender.
It’s safe to say that the IMF’s stance on Bitcoin has never changed, even if it’s now open to the idea of regulating the crypto space. So far, Bitcoin has faced many obstacles on the way to becoming legal tender around the world. Some are all in for it, others are firmly against it. It doesn’t help that the IMF is against it, but that was an expected move altogether.
Distinct Opinions Across the Board
In the midst of a crypto regulator crackdown, we’ve seen countries and regulators having distinct views on how it should be done. On a global scale, it is not seen as legal tender, but it can be used as a medium of exchange for some services and goods in some countries. In the USA, for example, it’s treated as property for tax purposes, but it’s not legal tender. In the South American country of El Salvador, it’s been legal tender for a few years already.
Bitcoin operates outside of traditional finance laws, so it’s no wonder that the IMF hates it. It has repeatedly warned countries—especially El Salvador—with serious repercussions if they adopt BTC as legal tender. Of course, countries do that without asking the IMF, including the likes of the Central African Republic.
Of course, Bitcoin adoption has faced many questions from different regulatory authorities. The International Monetary Fund certainly has some things right, but it’s not right to tell countries if they should or shouldn’t adopt Bitcoin or crypto.
Questions Over Use
There’s been a growing debate regarding the use of Bitcoin and crypto within the IMF. On February 23, the financial authority released a report that highlighted many reasons why cryptocurrencies such as Bitcoin shouldn’t be legal tender. There were nine policies which cited macro-economical, legal, regulator, and international coordination issues that supposedly don’t work in Bitcoin’s favor.
The IMF expects countries to adopt its new framework which should mitigate the risks crypto assets pose. At the same time, the framework it develops should harness the benefits of the innovative technology behind cryptocurrencies.
To be perfectly honest, there are a few obstacles standing in the way of Bitcoin adoption. First and foremost, the volatility is the biggest reason why countries should not accept it. It makes things difficult for Bitcoin as a reliable medium for exchange. El Salvador has countered this by buying the dip and waiting for the price to soar, but that’s a risk many wouldn’t like to take.
But, those IMF warning that it’s against the tenets of financial freedom seem more like they’re made out of resent rather than being set on realistic grounds. We also think that countries should be free to do what they want as long as they do the research first.
