The International Monetary Fund (IMF) has worked to push massive debt, the opening of markets for transnational corporations, and global socialism throughout the world for many decades. They have derided the rise of right-wing populism, but it is looking like Bitcoin and other cryptocurrencies may be even more of a threat as they are making the current financial institutions obsolete.
The IMF has published a white paper titled, “Monetary Policy in the Digital Age” for the June edition of their monthly Finance & Development magazine where they give begrudging credit to Bitcoin and cryptocurrencies. International financiers are growing more interested as crypto proves its worth in the market and shows it is here to stay.
“We cannot rule out the possibility that some crypto assets will eventually be more widely adopted and fulfill more of the functions of money in some regions or private e-commerce networks,” wrote Dong He, who serves as deputy director of the IMF’s Monetary and Capital Markets Department, in the report.
He admits that – with a level of skepticism in the global order remaining from the financial crash of 2007-08 – Bitcoin could eventually level the current economic system.
“Economists continue to debate the origins of money, and why monetary systems seem to have alternated between commodity and credit money throughout history. If crypto assets indeed lead to a more prominent role for commodity money in the digital age, the demand for central bank money is likely to decline,” Dong He wrote.
The IMF hopes that central banks can adopt cryptocurrencies in the years to come so they can remain relevant in this new age.
“Central bank digital currency could help counter the monopoly power that strong network externalities can confer on private payment networks. It could help reduce transaction costs for individuals and small businesses that have little or costly access to banking services, and enable long-distance transactions. Unlike cash, a digital currency wouldn’t be limited in its number of denominations,” Dong He wrote.
The IMF is also relying on regulation to prevent the explosive potential of Bitcoin. This is an ongoing push that iss polarizing the crypto community. Government regulation may be the only way that institutions like the IMF can stay relevant in the new monetary paradigm that is developing because of cryptocurrencies like Bitcoin.
“Government authorities should regulate the use of crypto assets to prevent regulatory arbitrage and any unfair competitive advantage crypto assets may derive from lighter regulation. That means rigorously applying measures to prevent money laundering and the financing of terrorism, strengthening consumer protection, and effectively taxing crypto transactions,” Dong He wrote.
The IMF admitting the obvious about crypto is a seminal moment – it shows that the legitimacy of these financial instruments have finally reached a critical mass and their relevance can no longer be ignored by the establishment.