Saturday, 04 July 2020

Cryptocurrencies are not real money - IMF

The International Monetary Fund sticks to the point that digital coins are not money

Cryptocurrencies and blockchain technologies are moving slowing towards mainstream as major financial companies and hi-tech giants are seeking exposure to this nascent industry.

Thus among recent developments Digitec Galactus, the biggest online retailers in Switzerland, now accepts cryptocurrencies, while Ripple’s coin XRP is available as means of payment on Woocommerce platform.

However, the International Monetary Fund is still sceptical about the viability of virtual money. The experts of the Fund do not buy into the idea that they can replace traditional currencies soon.

“Despite the hype, cryptocurrencies still don’t fulfill the basic functions of money as a store of value, means of exchange, and unit of account,” Antoine Bouveret, an economist, and Vikram Haksar, an assistant director, at the IMF, said about their findings. “Because their value is highly volatile, they have little use so far.”

The Fund is anxious about money laundering issues intensified by anonymity or pseudo anonymity of cryptocurrency transactions.

Meanwhile, the officials acknowledge the benefits of blockchain technologies both for the financial system and beyond.

“Blockchain could reduce the cost of international transfers, including remittances, and foster financial inclusion”, the report says, echoing statements made by Christine Lagarde last November at a FinTech conference.

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