IMF Urges Global Cooperation on Crypto: Sees Both Benefits and Risks

The International Monetary Fund (IMF) is keen to explore the potential of Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term and is urging regulators to cooperate on the matter. In a regular press briefing, the spokesperson for the organisation highlighted that cryptocurrencies might have potential benefits, but the surrounding risks remain.

Commenting on the issue, the IMF’s Communications Director, Gerry Rice, said: “Cryptocurrencies can have potential benefits, including the promotion of financial inclusion and more efficient payment and settlement processes.”

“But we have also alerted that cryptocurrencies can post considerable risks as potential vehicles for money laundering, terrorist financing, tax evasion and fraud. So, the bottom line, I think, we think greater international discussion and cooperation among regulators would be helpful,” he added.

The stance of the IMF on Bitcoin has not changed, as it is refraining from any comments on its value. Nevertheless, Mr. Rice mentioned in his comments on cryptos: “When asset prices go up quickly, risks can accumulate, particularly if market participants are borrowing money to buy those assets.”

“It is important for people to be aware of the risks and take the necessary Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term measures,” he explained.

Crypto Enthusiasts Critical of IMF

Cryptocurrency enthusiasts globally have been widely critical of the IMF and the BIS. In conversations with Finance Magnates, core developers shared that the stance of the existing global financial backstop organisations like central banks and the IMF are not relevant to the cryptocurrency’s future.

In their assessment of the market, sources shared that any attempt at supervision of Bitcoin by governments and regulators is not relevant to the cryptocurrency’s future. That said, the prevailing opinion is that the global financial regulators and institutions like the IMF will attempt to create a global cryptocurrency at some point in the future.