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The growing popularity of Bitcoin has led in numerous governments embracing the digital asset, which has displeased the International Monetary Fund [IMF]. The Washington, DC-based nonprofit has raised worries about Bitcoin and other cryptocurrencies becoming national currencies once more.
Its latest tweet noted,
“Privately issued crypto-assets like Bitcoin come with substantial risks. Making them equivalent to a national currency is an inadvisable shortcut.”
The IMF was more concerned about countries like El Salvador adopting Bitcoin and recognising it as their official currency. Previously, when the country originally announced its plans to make Bitcoin legal tender, the IMF stated that the usage of cryptocurrency would jeopardise “macroeconomic stability” and might also jeopardise financial integrity through involvement in criminal activities.
The countries who were adopting cryptocurrency, on the other hand, didn’t give a hoot about the IMF’s position. This week, Honduras installed its first cryptocurrency ATM. Meanwhile, Cuba has become the latest government to recognise and regulate cryptocurrencies like Bitcoin. As it moves forward in recognizing crypto, Cuba may reportedly be able to bypass the United States embargo, which prohibits the island’s international commerce and remittances.
The post attached to the IMF tweet also mentioned,
“Some countries may be tempted by a shortcut: adopting crypto assets as national currencies. Many are indeed secure, easy to access, and cheap to transact. We believe, however, that in most cases, risks and costs outweigh potential benefits.”
Meanwhile, the tweet itself did not sit well with the crypto community. The use of “privately issues crypto assets like Bitcoin” gained a lot of flak from the community. One of the Twitter users @MrCoinWhisperer noted,
“This confirms. Even the IMF have no idea when it comes to cryptocurrencies, especially Bitcoin.
I will grant them one fact. Some cryptocurrencies were privately issued. Bitcoin however was NOT ‘privately issued’ this alone clearly demonstrates the IMFs failure.”
Despite the IMF’s efforts to educate consumers about the risks associated with cryptocurrency, the IMF’s lack of information regarding cryptos was also clear.