The International Monetary Fund (IMF) has changed its tune on cryptocurrency bans, saying they may not be effective in the long term. In a recent blog post, the IMF said that while a cryptocurrency ban might have some benefits in the short term, it would likely be ineffective in the long term.

The IMF cited several reasons for its change of heart. First, he said that banning cryptocurrencies would not stop people from using them. Cryptocurrencies are decentralized, which means that they are not controlled by any government or entity. This makes them difficult to ban, as people can simply use them on platforms hosted in countries where they are legal.

Second, the IMF said that banning cryptocurrencies could have unintended consequences. For example, it could drive innovation underground, making it harder for regulators to track and monitor cryptocurrency transactions. It could also lead to the development of new, more anonymous cryptocurrencies that are even harder to trace.

The IMF concluded by saying that countries should carefully consider the costs and benefits of banning cryptocurrencies before making a decision. He said that while a cryptocurrency ban may have some benefits in the short term, it is likely to be ineffective in the long term.

The IMF's change of heart on cryptocurrency bans is a significant development. It suggests that the IMF is now more open to the idea of cryptocurrencies and may be willing to work with countries to regulate them in a way that is effective and safe.

It remains to be seen if other countries will follow the lead of the IMF and reconsider their cryptocurrency bans. However, the IMF's change of heart is a sign that the tide may be turning in favor of cryptocurrencies.

Source: Cointelegraph

#FMI #crypto2023

#FMI to create global platform to ensure #CBDC interoperability

The International Monetary Fund (FMI) is working on the development of a platform capable of enabling interoperability in the transaction of central bank digital currencies (CBDC) between different countries.

The information arises from the visit made to Morocco by the head of the organization, Kristalina Georgieva, to participate in a "High Level Policy Roundtable on Central Bank Digital Currencies". The development comes to confirm an incipient trend: while cryptocurrencies have suffered severe repressions in this time, CBDCs have had a better welcome.

The FMI is working on a global CBDC platform.

From the perspective put forward by the FMI in Morocco, CBDCs should not be developed behind the doors of each country pushing them. That is where it is understood that some kind of instability may arise, especially when the system is put to the test in transactions between different countries. That is why the organization considers it important and has already started working on the development of a platform that provides security for this type of operations.

Kristalina Georgieva specified this with marked clarity in her speech.

"CBDCs should not be fragmented national proposals. To have more efficient and fairer transactions, we need systems that connect countries: we need interoperability."

This is not the FMI's first favorable nod to CBDCs. In fact, the organization has already announced that it is preparing an information manual for the development of this type of instrument. The instructive tool should be ready within a maximum of 5 years.

When the agency informed about this initiative, it warned that a bad development may lead to serious inconveniences when it comes to enabling the operation of a CBDC. It also emphasized something that it now points out again: it is considered indispensable to move forward as a block, with common rules, and not with parallel regulations.

"The IMF wants central banks to agree on a regulatory framework that allows global interoperability. Failure to agree on a usual platform would create a vacuum that would likely be filled by cryptocurrencies."

Speaking about the development, Georgieva has mentioned that there are 114 central banks around the world, which are going through some of the stages of exploring CBDCs. According to the IMF chief, 10 of them are already in the final stages.

Chronology: Race for the Future of Money

Different stages of CBDC development in the 114 countries mentioned by the IMF. Source: Atlantic Council.

The FMI's positive assessments of CBDCs

Statements made by Kristalina Georgieva regarding the FMI's positive assessments of CBDCs highlight several aspects.

These instruments could help increase financial inclusion. They are seen as bridging access to more people, to financial services and at a lower cost.

Such a currency could also strengthen the resilience and efficiency of payment systems. It could make cross-border payments and remittances cheaper and faster.

Finally, they could reduce the number of intermediaries in cross-border payments. In addition, the IMF sees CBDCs as an opportunity to foster competition and improve transparency.

The international financial organization has repeatedly praised this type of currency. Georgieva has highlighted that it is these characteristics that drive the IMF's mandate in terms of promoting digital money.

"These are important considerations for the IMF, as we have a mandate to help ensure that digital money, including CBDCs, promotes domestic and international economic and financial stability."

The agency clarifies, almost in the face of every positive comment, that if CBDCs are poorly designed, they could exert the opposite effect they intend. It mentions as possible problems those related to financial stability, data privacy and legal challenges, financial integrity and cyber risks.

The list concludes with central bank operational risks.

#BinanceTournament #APfinanciero #crypto