The International Monetary Fund (IMF) has urged governments to adopt national cryptocurrencies considering the increasing adoption trend of financial technology. As technological advancements continue, person to person interactions are becoming easier due to the internet.
In this age of smart phones, people want fast and less bureaucratic solutions for cross-border transactions. Therefore, the use of cryptocurrencies is experiencing widespread adoption.
IMF committed to research in the cryptocurrency industry
Committed to researching emerging trends in financial technologies, the IMF has been following the developments keenly. This is in line with its mandate to issue advisory opinions to its member states and banks on emerging issues involving the money markets. Also, the IMF has a duty to suggest regulatory policies. These policies serve to level the global playing field for banks and governments.
Similarly, the IMF is advising governments to establish their own cryptocurrencies. This will help to tame financial fraud and hacks. However, since this ‘rebel’ technology is relatively safe, cheap and semi-anonymous, the system has become a safe haven for fraudsters and money launderers.
Cryptocurrencies offer anonymity
Cryptocurrencies are built on blockchain technology allowing users extensive anonymity during e-transactions. Without revealing their identity, any person can buy cryptocurrency from an exchange of their choice. They are also able to store it in an anonymous e-wallet only identified by an ever-changing code before spending it. While in the wallet, the ‘money’ is readily available for payments and micro-payments. In fact, using cryptocurrencies are efficient and user-friendly without interference from the government of tax institutions.
It is perhaps this anonymity that motivates cybercriminals to wreak havoc in the crypto industry. Additionally, the leading cryptocurrencies have been hit with massive price fluctuations. The IMF believes a national cryptocurrency issued by the Central Government will eliminate these challenges.
Cryptocurrency services are cheaper than those provided by mainstream banks
A cryptocurrency issued by the Central Bank is tamper proof according to the IMF. The reason is that only central banks possess the requisite machinery to prevent fraud and money laundering.
According to the Head of the IMF Christine Largade, “ Billions of pounds of investment is going into startup businesses that offer services based on blockchain technology, which is cheaper and quicker than services offered by mainstream banks.”
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