{"id":8138,"date":"2022-10-28T08:29:32","date_gmt":"2022-10-28T08:29:32","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=8138"},"modified":"2022-10-28T08:29:33","modified_gmt":"2022-10-28T08:29:33","slug":"does-the-imf-have-a-vendetta-against-cryptocurrencies","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=8138","title":{"rendered":"Does the IMF have a vendetta against cryptocurrencies?"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>Is the International Monetary Fund (IMF) really hostile to crypto? Many in the cryptocurrency and blockchain space think so. In January, the fund asked El Salvador to drop Bitcoin (BTC) as legal tender.\u00a0<\/p>\n<p>In May, it reportedly pressured Argentina to curtail crypto trading as the price for an IMF loan extension, and it also recently warned the Marshall Islands that raising a digital currency to the status of legal tender could \u201craise risks to macroeconomic and financial stability as well as financial integrity.\u201d<\/p>\n<p>\u201cI do believe that the IMF is an implacable foe of crypto,\u201d David Tawil, president and co-founder at ProChain Capital, told Cointelegraph. Given that Bitcoin and other cryptocurrencies are \u2018\u201cissued\u201d by non-state entities and are borderless, \u201ccrypto has the potential to be ubiquitous, which can significantly curtail the need for the IMF,\u201d a financial agency of the United Nations.<\/p>\n<p>\u201cBitcoin stands against everything the IMF stands for,\u201d Alex Gladstein, chief strategy officer of the Human Rights Foundation, told Politico in June. \u201cIt\u2019s an outside money that\u2019s beyond the control of these alphabet soup organizations,\u201d while Kraken\u2019s Dan Held simply tweeted, \u201cThe IMF is evil,\u201d in response to the fund\u2019s reported actions in Argentina.<\/p>\n<p>Still, others believe that this multilateral lending institution that serves some 190 countries \u2014 and has long been a lightning rod for criticism in the developing world \u2014 may have a more nuanced view of cryptocurrencies. <\/p>\n<h2>A broad-minded view of crypto-assets?<\/h2>\n<p>In a September report, \u201cRegulating Crypto,\u201d the IMF seemed to have no problem with the existence or even proliferation of non-governmental digital currencies. Indeed, it called for a \u201cglobal regulatory framework\u201d for cryptocurrencies in order to bring order to the markets \u201cand provide a safe space for useful innovation to continue.\u201d\u00a0<\/p>\n<p>\u201cThe IMF has taken a very broad-minded view of crypto-assets,\u201d John Kiff \u2014 managing director of the CBDC Think Tank and, until 2021, a senior financial sector expert at the IMF \u2014 told Cointelegraph, especially if one looks beyond some of the recent cases cited above. He added:<\/p>\n<p>\u201cThe Marshall Islands and El Salvador opinions pertained to country governments adopting crypto as legal tender when their unit of account currencies were already well established. And, those adverse opinions were mostly focused on the macroeconomic impact of hitching their fiscal wagons to cryptocurrencies.\u201d\u00a0<\/p>\n<p>Institutionally speaking, \u201cIt\u2019s true that the IMF is skeptical of crypto, and it came down hard on El Salvador,\u201d Josh Lipsky, senior director of the Atlantic Council\u2019s GeoEconomics Center, told Cointelegraph. But that\u2019s because the fund was worried about the financial vulnerability of that nation\u2019s economy. The IMF \u201cwill have to bail them out\u201d if and when El Salvador reneges on its international debt payments.<\/p>\n<p><strong><em>Recent:\u00a0Bitcoin miners rethink business strategies to survive long-term<\/em><\/strong><\/p>\n<p>Meanwhile, \u201cArgentina has done something like 20-plus lending programs over the years, so it can\u2019t really go back to the IMF and renegotiate [its loans] while it is also conducting crypto experiments,\u201d added Lipsky, who previously served as an adviser to the IMF and speechwriter to Christine Lagarde. The mayor of Buenos Aires, a cryptocurrency proponent, was reported to be developing plans that would allow the city\u2019s residents to pay their municipal taxes in cryptocurrencies. \u201cThat raised some eyebrows\u201d at the fund, commented Lipsky. <\/p>\n<p>Even Tawil agreed that the IMF was justified in forcing \u201ccertain policy choices, like austerity or taxation or removal of government subsidies that cannot be supported economically\u201d under certain circumstances. If a country \u201chas awful policies\u201d that will make it persistently dependent on the fund\u2019s support, then \u201cthe IMF will use its lending ability to influence policy choices.\u201d<\/p>\n<h2>Money laundering risks\u00a0<\/h2>\n<p>In connection with the Marshall Islands\u2019 bid to implement a sovereign digital currency, known as SOV, as a second legal tender, the IMF\u2019s Yong Sarah Zhou cited not only financial stability perils but also \u201canti-money laundering and combatting the financing of terrorism (AML\/CFT) risks.\u201d\u00a0<\/p>\n<p>Simon Lelieveldt, a Netherlands-based regulatory consultant for payments and blockchain, wasn\u2019t really sure this was the fund\u2019s main objection, however. Yes, crypto can be \u201cused as an investment asset and also a tool for money laundering \u2014 as can cash in the bank,\u201d but it is more likely crypto\u2019s \u201cungoverned nature\u201d that alarms the IMF and other intergovernmental organizations, including the Financial Action Task Force.<\/p>\n<p>Governments in the developing world sometimes feel \u201coppressed by IMF rulings and neoliberal dogmas\u201d and are tempted to \u201cescape the harness of the IMF\u201d through the use of alternate legal tenders, actions that inevitably \u201clead to reactions from institutions that are afraid of losing their power,\u201d he told Cointelegraph. <\/p>\n<h2>A misbegotten case?<\/h2>\n<p>El Salvador was the world\u2019s first country to adopt Bitcoin, or any cryptocurrency, as legal tender in September 2021. \u201cEl Salvador was a really bad use case,\u201d Lipsky told Cointelegraph. \u201cWhat Terra Luna did for crypto in the United States, El Salvador did for crypto globally.\u201d\u00a0<\/p>\n<p>What went wrong? \u201cThere were so many failures, but if I were to pick one, it would be how rushed it felt.\u201d There was a \u201cpaper-thin, two-page explanation of how it [Bitcoin] would work,\u201d and that was it. <\/p>\n<p>Rather than take an experimental approach, beginning with small pilots and independent risk assessments, the Bitcoin Law was hurried through El Salvador\u2019s legislature and immediately imposed \u2014 \u201creckless and rushed,\u201d according to one critic.<\/p>\n<p>The IMF\u2019s wariness of crypto as legal tender only deepened in the wake of the El Salvador inept BTC launch, in Lipsky\u2019s view.<\/p>\n<p>Still, institutions like the IMF and the World Bank arguably have an \u201coutsized influence\u201d on small countries looking to take more control over their currencies, and they \u201ccan apply pressure, from making aid conditional to simply blocking aid, unless countries comply with their requirements,\u201d Henri Arslanian wrote in his recently published book, <em>The Book of Crypto. <\/em><\/p>\n<p><strong><em>Recent:\u00a0What does the global energy crisis mean for crypto markets?<\/em><\/strong><\/p>\n<p>When El Salvador recognized Bitcoin as legal tender, for instance, the World Bank, another lending institution in the United Nations system, not only criticized the move but \u201calso refused to provide technical assistance, citing environmental and transparency concerns,\u201d wrote Arslanian.<\/p>\n<h2>Natural enemies?<\/h2>\n<p>Given the mandate of nongovernment organizations like IMF and the World Bank \u2014 which is, broadly speaking, to support global financial stability and spur economic growth in the developing world \u2014 there could simply be a natural tension vis-a-vis decentralized currencies \u2014 which are often volatile and hard-to-control financial instruments with no return address or even identifiable individuals in charge.\u00a0<\/p>\n<p>As Tawil noted, the IMF is often called upon to deal with economies \u201cplagued by corrupt and inept leadership and illusory currencies,\u201d and therefore, it really has \u201cno incentive to add another \u2018issuer-less\u2019 currency.\u201d Nevertheless, he added:<\/p>\n<p>\u201cThe IMF cannot ignore reality, which is that our future will be filled with cryptocurrencies.\u201d<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/does-the-imf-have-a-vendetta-against-cryptocurrencies\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is the International Monetary Fund (IMF) really hostile to crypto? Many in the cryptocurrency and blockchain space think so. In January, the fund asked El Salvador to drop Bitcoin (BTC) as legal tender.\u00a0 In May, it reportedly pressured Argentina to curtail crypto trading as the price for an IMF loan extension, and it also recently [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":8139,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-8138","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8138","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8138"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8138\/revisions"}],"predecessor-version":[{"id":8140,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8138\/revisions\/8140"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/8139"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}