The IMF is currently urging fiat currency protection from digital assets. Check out the latest reports about this below.
IMF on fiat and crypto
According to a recent blog post by the International Monetary Fund (IMF), countries should prioritize the protection and value of sovereign fiat currency over crypto assets.
The IMF urges nations to safeguard the integrity of their financial systems to prevent them from being replaced by crypto assets.
“The defense against the substitution of sovereign currencies is the maintenance of robust, trusted, and credible domestic institutions. Transparent, consistent, and coherent monetary policy frameworks are crucial for an effective response to the challenges posed by crypto assets.”
For these reasons and more, according to the IMF, countries must avoid deeming crypto as legal tender.
“To protect national sovereignty, it is important not to grant crypto assets official currency or legal tender status. Doing so would require accepting them in many jurisdictions for tax payments, fines, and debt settlements, and could generate fiscal risks for government finances, and could threaten financial stability or rapid inflation.”
It is also important to mention the fact that Tte IMF functions as a bank for nations, assisting with financial difficulties.
If a country is having difficulty paying off its debts, the IMF can provide financial assistance. Furthermore, the IMF advises nations on methods to improve their economies.
The IMF has previously cautioned against utilizing cryptocurrencies for tax purposes. In fact, just recently, the IMF suggested that global tax systems should be updated to account for the existence of crypto assets.
IMF addressed crypto bans
The International Monetary Fund’s (IMF) economists are advocating for proactive measures to manage crypto risks, as a number of countries are implementing crackdowns on the industry.
According to a recent report authored by IMF’s Western Hemisphere Department division chief, Mauricio Villafuerte, and economists Rina Bhattacharya and Dmitry Vasilyev, a complete ban on crypto may lead to negative outcomes.