Cryptocurrency should not get official currency status - warns International Monetary Fund

Brussels – The International Monetary Fund (IMF) warned that if the country’s sovereignty is to be protected, cryptocurrency should not get the status of official currency or legal tender. Doing so would threaten the nation’s economic stability or lead to a spike in inflation. Besides, the IMF has urged the concerned countries to make strict rules regarding cryptocurrency.

Nonetheless, the turmoil in the cryptocurrency sector last year wiped out $1.4 trillion, due to which cryptocurrency investors suffered huge losses globally. After this, some countries had indicated to take strict steps against cryptocurrency. However, there have been claims that no single nation can successfully ban cryptocurrency without all countries joining it. Against this backdrop, the IMF seems to be taking a firm stand against crypto by appealing at the G20 meeting for developed countries to take the initiative to control crypto.

Moreover, including cryptocurrency in other jurisdictions will be necessary to collect taxes and fines if given the official currency status or legal tender. In addition, the allocation must be made to pay off the crypto debt. The International Monetary Fund has indicated in its recently released report that if this happens, the threat to the respective countries’ economies will increase, economic stability will also be in danger, or there will be a big flare in inflation.

The Monetary Fund has acknowledged that some countries have taken the necessary steps to protect their customers and investors from the threat of cryptocurrencies. However, despite losses during the dangerous turmoil that rocked the crypto sector last year, Monetary Fund has expressed concern over the growing enthusiasm for Bitcoin this year. Nevertheless, fraud in this sector cannot be avoided without strong security provisions for crypto. Thus, the IMF has highlighted that investors’ expected returns could be adversely affected.

The Monetary Fund claimed that a transparent and clear Monetary Policy Framework (MPF) would be key to countering the challenges posed by crypto. At the same time, saying that the world’s major countries should come together, the International Monetary Fund appealed in its report that an all-inclusive, consistent and coherent role regarding cryptocurrencies was necessary.

Meanwhile, the use and trading of crypto has been on the rise worldwide over the past few years. The dependence on digital currency and assets is beginning to prove significant in some economies. Against this backdrop, the Monetary Fund appears to have warned against restoring official status to crypto. Simultaneously, the Monetary Fund also draws attention to the dangers emerging from it.