IMF O.K. With Crypto? Or at least Unbacked Crypto Assets)...?
A recent published IMF report on regulating the crypto ecosystem has concluded that outright Bitcoin Bans won't work in the long run.
To quote from the report, bans are....
'disproportionate, likely to stifle innovation, and there are strong incentives and technological alternatives for circumvention.
So that's pretty nice, they start off by recognising that crypto is innovative and recognise that the tech and incentives are already in place for crypto holders to work around any national level ban.
NB it's pretty obvious from reading the intro of the report that there's NEVER going to be global regulation on crypto, so national level bans are all we are ever going to see!
Traditional financial institutions are the problem...
To quote the report again, following on the from the quote above rather than banning crypto.....
'Authorities need to address the underlying drivers for crypto usage, such as weak macroeconomic conditions, misleading marketing, and a lack of trust in traditional financial services'.
Well that's interesting... I found this a bit surprising until I remembered the IMF is looking at several economies, and a huge chunk of national economics are in a bit of a mess, so maybe this makes sense... and it seems to see crypto as a kind of kick up the ass for lax FIAT institutions to improve...
The IMF recognises the benefits of crypto...
The report states that crypto tech offers greater competition in at least three areas:
- remittances
- trade financing
- cross-border payments.
And it recognises that decentralised competition from crypto can offer consumers a real alternative to FIAT institutions.
Light regulation not off the cards...
For the most part the IM thinks countries can work within existing regulatory frameworks to manage crypto, focussing on wallet providers. miners, and exchanges, however they do recognise that crypto is broader than just these aspects and so some further targeted regulations might be necessary.
Limitations
The report only really focuses on Unbacked Crypto Assets....
But that does mean BITCOIN and ETH, so we're talking a hefty chunk of the total market cap!
Final thoughts...
Anyone else feeling in the mood for more BTC...?
They can't stop the sunrise.
Reports like this are not a coincidence.
It's all tied back to Blackrock and the ETF bid.
Institutions all over the world are colluding on this one.
It's actually quite impressive.
Yes that wouldn't surprise me at all.
I think the IMF's assessment of crypto assets is a fair one. They recognize the potential risks of these assets, but they also acknowledge that they do not pose a significant threat to financial stability at this time. I think it is important to continue to monitor the development of crypto assets and to assess their impact on the financial system.