IMF Moves Away From Its Attitude Towards Cryptocurrencies

In the latest statements made by the International Monetary Fund (IMF), the optimistic approach of the institution towards cryptocurrencies drew attention. The IMF reiterated its call for regulation while saying in a report that directly banning cryptocurrencies would not be beneficial in the long-term outlook.

Analysts of the International Monetary Fund (IMF) argued in a report on Latin America and the Caribbean that a ban on cryptocurrencies would not be an ideal solution, while alternatively, it was emphasized that especially developing countries should use the demand for cryptos efficiently to meet their digital payment needs.

In the article in which the central bank digital currency form was discussed, it was seen as a remarkable detail that economists moved away from the IMF’s critical approach to cryptocurrencies in the past. Acknowledging the worldwide adoption of cryptocurrencies, IMF economists emphasized that Latin American countries are among the top 20 countries in the world in terms of interest in crypto. Economists, who discussed the structural problems of developing countries such as macroeconomic instability, low reliability, lack of capital flow and informal economy in Latin American countries, also emphasized that the adoption of crypto assets poses a risk for countries according to these facts.

In addition, it is thought that the crypto ban will not be a solution in countries with structural problems and this industry should be benefited through regulations. Concluding that crypto assets carry different risks by country, economists said that several countries in Latin America have banned cryptoassets, but these countries are unlikely to have effective results in the long run. Instead of this approach, it is recommended that the demand of the citizens of the country for crypto should be put on the agenda and the way to benefit from the industry should be taken. IMF economists argue that it can be beneficial to create a transparent and reliable market by recording crypto-asset transactions through regulations.

On the other hand, the IMF has started to increase its concentration on digital assets through the central bank digital currency (CBDC) in recent days. In the latest statements made by the IMF, it was stated that there will be limited effects for countries to carry out CBDC activities within their borders and that these digital currency forms should be interconnected. In this context, the IMF reported that they are working on a CBDC platform that will operate in the international market.