Within a day of El Salvador president Nayib Bukele announcing his plan to build a ‘Bitcoin city’ powered by a volcano and financed by Bitcoin bonds, the International Monetary Fund (IMF) has warned against the flagship cryptocurrency being used as legal tender.
“Given Bitcoin’s high price volatility, its use as a legal tender entails significant risk to consumer protection, financial integrity, and financial stability,” the IMF said.
“Its use also gives rise to fiscal contingent liabilities. Because of those risks, Bitcoin should not be used as a legal tender.”
The IMF’s lack of membership of the Bitcoin Fan Club has seldom been in doubt, but Marcus Sotiriou – a sales trader at digital asset broker GlobalBlock believes this latest rhetoric from Washington DC clearly shows how they view the digital asset and are in no way pleased to see countries adopting it.
“However, there is little the IMF can do about it, with the overall digital asset market now valued at near $3 trillion and demand for the asset class worldwide continuing to increase,” he says.
He points ‘Down Under’ where, for example, the chairman of Australia’s Securities and Investments Commission (ASIC) claimed recently “crypto is on our doorstep, here and now, and being driven by extraordinary consumer and investor demand. The implications for consumers are potentially huge.”
This recognition from one of the wealthiest countries in the world, explains the broker, means that the IMF’s stance may be falling on deaf ears for other countries.
In other news crypto adoption continues to rise as Citigroup is set to hire 100 people for its crypto division.
Emily Turner, who oversees business development for the division explained: “We believe in the potential of blockchain and digital assets including the benefits of efficiency, instant processing, fractionalisation, programmability, and transparency.”
“Giants like Citi integrating crypto into their services adds significant credibility to the industry,” adds Sotiriou .
“I think the biggest banks in the world adopting cryptocurrency will create a snowball effect for other institutions to get on board.”