Cryptocurrencies have been all the rage, but if any financial institution disagrees with their use, it is the IMF, sign up here.
The unfavorable situations in which cryptocurrencies have been involved have been lent to predict that this type of digital instrument is used for acts of corruption and tax evasion.
This type of circumstance has called into question the prestige of a new technology, which according to its creator, would help to eradicate the inflationary problems of the world and the traditional economy.
The IMF versus cryptocurrencies
It has been possible to determine, according to research, that cryptocurrencies tend to have more excellent management and operation in countries where levels of corruption are high, and there are economic and financial controls everywhere.
The three greatest fears of the International Monetary Fund regarding the use of cryptocurrencies are that they have been involved in acts of fraud and money laundering and, in some cases, have even financially collaborated with terrorism.
That is why many countries’ and entities’ regulations regarding cryptocurrencies would not sound unreasonable. The blockchain is the platform that allows the registration of operations but does not require any information or data from users, which can make a doubtful origin in exchange for virtual money.
Many countries in the world want to be part of the digital market but require a variety of regulations that may vary from one country to another.
Cryptocurrencies are attractive and exciting for many, but their lack of support and legality makes them consider risky and vulnerable.
The reports that have been created around the management of crypto assets are not at all positive if it refers to the proper administration of the resources that the concept of crypto investments can generate.
Currently, many people have joined the crypto market, all this due to the constant crises of which the countries have been victims.
Cryptocurrencies are not controlled by any entity other than their users, so the funds they manage are at their discretion since there is no channel to validate the invested funds.
According to the IMF, a survey was carried out in more than 55 countries, and the results were obtained. However, it was a relatively small sample, indicating that many people are using cryptocurrencies to protect their savings.
Given this situation, this global control and financing entity suggests paying close attention to the management of the funds that these individuals are allocating to investments since, in many cases, they will be exempt from fiscal supervision.
Cryptocurrencies have turned out to be a financial lifeline for many countries that cannot use the IMF’s financing plans, which certainly generates discomfort in this institution.
Countries that legalize cryptocurrencies are at higher risk
The most significant warning that has been created worldwide by the International Monetary Fund is addressed to countries that have considered and are in the process of legalizing digital currencies as legal tender.
After these warnings, the country that generated the most controversy was El Salvador, which created the first Bitcoin city and adopted cryptocurrencies (Bitcoin) as a traditional payment method.
Many still consider it a hasty decision whose effects at the micro and macroeconomic level in the country could be huge, something that undoubtedly did not worry the President at all.
This type of dual economy, where citizens can choose their payment currency, makes traditional commercial operations and the acquisition of goods and services confusing for its users.
Another concern of financial entities worldwide is that the adoption of cryptocurrencies as part of a country’s economy could drastically influence monetary policies since these would reduce their power.
Something that could be evaluated since the best option is always sought where the citizens benefit the most and not in the interests of the politicians who lead the nations.
Being decentralized currencies, what would then be the role of central banks? First, they would lose positioning, and policies regarding the setting of interest rates would be left out.
The issue of the adoption of cryptocurrencies is quite interesting for countries that consider these financial instruments as the future of the economy, with the steps that cryptocurrencies have already taken leaving indelible marks.
It is a matter of evaluating the various factors that influence the economies since a developing country is not the same as a country considered a world power.