By Alicia Maher
Reuters report that the international monetary fund (IMF) is ramping up its efforts at monitoring cryptocurrencies. According to the most recent IMF published paper, IMF’s goal is to “monitor and identify” possible hiccups in the switch to a digitized economy.
IMF Recognizes The Changing Financial Landscape
The report further stated that “fast technological innovation is leading to a new phase of the digitized economy.” Thus, there would now be “faster, cheaper, and easily accessible” financial transactions without regional barriers.
Thus, payments are settled more effectively without anyone being deprived because of nationality or other factors. But, this can only be implemented if the IMF keeps itself “abreast of policy developments in various regions,” which involves in-depth research on prospective digital economies.
Therefore, the IMF intends to collaborate with the appropriate regulatory body in each region like the world bank, financial regulators, and the central banks. This will also improve its knowledge of the impending digitized economy.
IMF Wants Experts In Various Fields
You’d recall that the IMF revealed in its April 2021 IMF report that its digital money research would require the knowledge of more experts. Hence, it plans to hire at least five groups of exports. The IMF report lists the expert fields required as fiscal economists, finance experts, lawyers, digital risk experts, and data specialists.
The paper presumes that combined research from these experts should provide adequate research into the virtual asset space. The fund’s focus will be more on crypto assets, stablecoins, and central bank digital currencies (CBDCs). It will also analyze the effects of these assets on financial freedom and how they can substitute current economic systems to become reserve currencies.
IMF Warns Against Country’s Cryptocurrency Adoption
During the week, the financial watchdog issued an indirect warning on the recent adoption of Bitcoin by El Salvador. However, it didn’t specifically mention El Salvador. Part of the warning notice states that “adopting virtual assets as a legal currency” is a threat to the local economy and confuses the citizens when they have to decide which “currency to hold” at each time.
The IMF was also in the news for the wrong reasons earlier in the week when it states that CBDCs would be a level ground for the world’s financial system. The IMF warning comes when other central banks, such as the central bank of Nigeria, revealed plans to launch their state-controlled cryptocurrency.
Top IMF directors opined that countries adopting crypto-assets could expose their banks and payment settlement institutions to the sharp fluctuations of the virtual asset market. However, despite IMF’s warning notice, the head of Azerbaijan’s apex bank, Elman Rustamov, has revealed that the bank is still focused on introducing a central bank digital currency in the nearest future. He stated that the bank believes digital currencies represent the future of the financial world.
Meanwhile, German legislators have approved a new law in which firms can allot 20% of their funds to a special crypto fund. If successful, this move might be the template for other leading world economies.