IMF Cannot Accept Cryptocurrency As Official Money

IMF Director Kristalina Georgieva finds it difficult to regard crypto as a currency (123ru)

JAKARTA – The Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva stated that it was difficult for her to consider cryptocurrency as a currency. This was conveyed by Georgieva at a virtual event organized by the Italian University of Bocconia.

Launching Reuters, the IMF director mentioned the challenges of the current financial authorities are efforts to ensure currency interoperability. According to him, the main consideration is whether a state-backed digital currency can function as a medium of exchange that is trusted by the public.

In addition, other questions arise such as whether CBDCs can play a role in domestic economic stability and how they follow international regulations introduced by organizations such as the Bank for International Settlements (BIS).

Launching Bitcoin.com News, BIS has led a number of projects related to piloting the use of digital currencies issued by countries in international transactions such as the collaboration between the Reserve Bank of Australia, Bank Negara Malaysia, Monetary Authority of Singapore, and the South African Reserve Bank.

BIS also led central bank digital currency (CBDC) trials conducted by countries such as China, Hong Kong, Thailand and the UAE, as well as CBDC trials conducted by Banque de France and the Swiss National Bank.

“[It is] very impressive how the international community, central banks, institutions like us are now actively involved in ensuring that in this fast-moving digital world, money is a source of trust and helps the economy function rather than [being] a risk,” said Georgieva.

The IMF director also considered that CBDC is a very trustworthy digital money. On the other hand, Georgieva admitted that it was difficult for her to consider cryptocurrencies as official money. Moreover, Bitcoin and other crypto assets have no intrinsic value and their value is highly volatile.

"In the history of money, it's hard to think of it (cryptocurrency) as money," he said.

In addition to discussing the challenges faced by financial authorities, Georgieva also discussed the impact of the Covid-19 pandemic that has hit the world. However, he assessed that currently a number of countries seem to be more prepared in anticipating a crisis like the one Greece experienced some time ago. The IMF chief warned the government to be careful when shifting away from medium-term fiscal consolidation in order to write off the country's debt during the pandemic.