The International Monetary Fund (IMF) finally seems to be seeing sense on crypto and realising it is already becoming a major force in the global financial system and is the future of finance.
The Washington-based UN agency has admitted this week that in recent years crypto assets have gone from being “niche products” to having more of a mainstream influence.
In a new report, officials noted that crypto assets have decisively shifted away from being assets without much impact to the wider public to ones used for investments, hedges against weak currencies, and as payment instruments.
This is a big deal.
The fact that such an influential global financial agency as the IMF is finally getting on board is an important step towards universal credibility, legitimacy and mass adoption of cryptocurrencies.
It’s especially important as the IMF has not always been on the right side of history with crypto assets. Indeed, it has appeared that it has been almost frightened of the inevitable future of finance.
Last year, the IMF demanded that El Salvador, which became the first country to adopt Bitcoin as legal tender, abandon the plans.
As I said at the time, “the IMF asking a pioneering sovereign nation to drop a future-focused financial policy that attempts to bring it out of financial instability and a reliance on another country’s currency shows the institution to be outdated.
“Why do they continue to want to pile on debts to poorer countries that they know are unlikely to be able to repay using traditional currencies? Is the IMF worried about the domino effect of nation-state adoption that might weaken their dominant global influence? If so, is this a warning shot to those countries?”
The recent apparent u-turn on cryptocurrencies from the Fund is, then, to be championed.
I’m also wholeheartedly supporting the IMF’s calls in this report for regulation of the crypto market. It’s something I have been urging for many years.
As digital currencies, including Bitcoin, are set to play an ever greater role in the international financial system, they must be held to the same regulatory scrutiny as other parts of the system.
The IMF might have been late to the party, but better late than never.