IMF issues veiled warning against El Salvador’s Bitcoin law

Ozero

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Quote from: avikz on July 28, 2021, 01:32:52 PM

Quote from: Nathrixxx on July 26, 2021, 06:02:51 PM

Am update on International Monetary Fund (IMF) versus El Salvador's bitcoin might interest you with this...

Quote

|Making any cryptocurrency a national currency “is an inadvisable shortcut” to more inclusive financial services, according to two IMF officials.

For further readings
https://cointelegraph.com/news/imf-issues-veiled-warning-against-el-salvador-s-bitcoin-law?utm_source=thecryptoapp

Well IMF is funded by banking system of various countries. So that justifies their move and statements against El-Salvador. But it's true that declaring bitcoin as a national currency, is a huge risk! Especially considering the price volatility, it is extremely difficult. No one knows which direction bitcoin is going to take. So if bitcoin price takes nosedive, the entire economy of a country will go down to that extent and vice versa.

The president of El-Salvador is extremely bullish on bitcoin and hence he has taken such huge risk. But what IMF says, is not something to ignore entirely. With bitcoin, one cannot have a stable position. It's either up or down! That's what the major concern is!

That is why I am wondering how this very risky experiment in El Salvador will end. Bitcoin is not intended to become the national currency of any state. There is a risk here for bitcoin itself. And not only because if he fails in this country, it can affect him and his price. Raising it to the national currency may well cause opposition from such international organizations as the IMF, and not only it. Basically, this is what we are already starting to see.
The G20 countries instructed the FATF to prepare new rules for the circulation of cryptocurrencies by October, and it is possible that they will directly prohibit states from using cryptocurrencies as national currencies or something similar.

CryptoYar

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I have never seen anything worse in this world than the IMF.

The IMF is bad because it traps weak countries by lending and when a country does not have the money to repay the loan, it gives a new loan to repay the loan. In the same way, it destroys the economy of every country

If they were sincere, they would give some time instead of a new loan. But no, they have to interfere in domestic foreign policy.
Now El Salvador needs $1b loan that's why they passing such comments

Quote from: https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSL1N2MT2SQ

El Salvador is in the middle of negotiations with the IMF for a $1 billion program to patch budget gaps through 2023, following $389 million approved last month to help the government deal with the COVID-19 pandemic.

hugeblack

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There is always solutions according to the International Monetary Fund and if they are not followed, the Fund gives warnings on it but does not mean that it is the truth.
Many countries have applied international IMF policies, and others have not done so, however, its situation is very good.
I would like to clarify that the views made by that fund are sometimes biased and inaccurate.

Kong Hey Pakboy

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The finally made their move against El Salvador, it's to be expected since they really don't like a nation not going along with what El Salvador is currently doing. I think El Salvador will bduge to this call by the IMF since IMF is an influential organization internationally and they know how to make people move.

Gozie51

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Quote from: dothebeats on July 29, 2021, 05:18:45 PM

Not surprised that the IMF will come up with such a statement concerning El Salvador's openness into using and accepting bitcoin. The statement that they (IMF) released may have some implications on their relationship with the country, and may even restrict some services, offers, and other agreements that they have with the country. Given that the IMF is basically backed by banking entities, they would really be hard on countries with such kind of policies that are open on cryptocurrencies.

Generally yes cryptocurrency is looking like a threat to agencies that control Fiat and it is really suppose to look that way because they are handled by people who work under it for livelihood to take care of their families. Just as the banks are protecting there jobs, IMF may also try to frustrate countries who are making progressive plans to adopt cryptocurrency by making laws running against it.

dothebeats

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Not surprised that the IMF will come up with such a statement concerning El Salvador's openness into using and accepting bitcoin. The statement that they (IMF) released may have some implications on their relationship with the country, and may even restrict some services, offers, and other agreements that they have with the country. Given that the IMF is basically backed by banking entities, they would really be hard on countries with such kind of policies that are open on cryptocurrencies.

teosanru

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I think the arguments given by IMF are so lame that an undergraduate Corporate Finance Student can give solutions to them:

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The two IMF officials alleged that countries adopting cryptocurrencies as national currencies or “granting cryptoassets legal tender status” risked domestic prices becoming highly unstable, also emphasizing assets being used contrary to Anti-Money Laundering and combating the financing of terrorism measures in addition to having issues surrounding macroeconomic stability and the environment.

So true terrorism was actually founded after 2009, it didn't even exist before that, terrorists use to work for free before that. I don't see paper notes being banned so far. Also KYC is a very simple procedure to ensure that illicit activities can be stopped to great extent. At max you can say is that citizens can only make payments from KYC wallets to other's KYC wallets. If this happens the money trail is unbeatable, no other technology can provide a better trail for sure.

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“If goods and services were priced in both a real currency and a cryptoasset, households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities,” said Adrian and Weeks-Brown. “Government revenues would be exposed to exchange rate risk if taxes were quoted in advance in a cryptoasset while expenditures remained mostly in the local currency, or vice versa.”

Government can easily eliminate exchange rate risk either by maintaining adequate forward or options contracts in the future markets until the expenditures become in crypto assets, which they will soon become. In fact the government should devise a policy to ensure most of the expenses like salaries are made in crypto assets that are received in taxes. A simple survey could be sought from the people to ask about their choice of mode of payment of tax. Government can then plan its budget accordingly.

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They also claimed that monetary policy, in general, “would lose bite,” implying widespread crypto adoption lessens the credibility of any country adopting an asset like BTC or another token, and pointing to the “massive fluctuations in cryptoasset prices.” The price of Bitcoin has already moved between roughly $65,000 and $30,000 this year and reached more than $40,000 on Monday before dipping to the $37,000s.

That's not even an excuse, compare it to Zimbabwe and Venezuela, why isn't IMF more concerned about them first? Hyperinflation is at it's peak here.

https://peoplesdispatch.org/2020/03/19/imf-refuses-aid-to-venezuela-in-the-midst-of-the-coronavirus-crisis/

Lucius

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Quote from: avikz on July 28, 2021, 01:32:52 PM

The president of El-Salvador is extremely bullish on bitcoin and hence he has taken such huge risk. But what IMF says, is not something to ignore entirely. With bitcoin, one cannot have a stable position. It's either up or down! That's what the major concern is!

I’ve written before, El Salvador has the choice to continue to use the US dollar and sink even more over time (if we’re aware of the state of US finances), or to try to take risks with Bitcoin. I think the risk is justified because Bitcoin will not be the only currency, and everyone will be able to choose if they want to pay something with USD or Bitcoin. Sometimes people will benefit greatly from BTC (say like in moments like this), and sometimes they will, unfortunately, lose out on the value of BTC - but I think we can all be grateful to one man who made such a bold move.

The IMF, the World Bank, and various other organizations that help developing countries really shouldn’t influence a country’s internal affairs, because their results speak for themselves. Unlike the conditions, they set when providing financial assistance, with Bitcoin you don't have to become a modern slave to change something.

What hurts them the most (IMF) is the fact that no one asked them anything, as well as the fact that there is nothing they can do to prevent it.

avikz

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Quote from: Nathrixxx on July 26, 2021, 06:02:51 PM

Am update on International Monetary Fund (IMF) versus El Salvador's bitcoin might interest you with this...

Quote

|Making any cryptocurrency a national currency “is an inadvisable shortcut” to more inclusive financial services, according to two IMF officials.

For further readings
https://cointelegraph.com/news/imf-issues-veiled-warning-against-el-salvador-s-bitcoin-law?utm_source=thecryptoapp

Well IMF is funded by banking system of various countries. So that justifies their move and statements against El-Salvador. But it's true that declaring bitcoin as a national currency, is a huge risk! Especially considering the price volatility, it is extremely difficult. No one knows which direction bitcoin is going to take. So if bitcoin price takes nosedive, the entire economy of a country will go down to that extent and vice versa.

The president of El-Salvador is extremely bullish on bitcoin and hence he has taken such huge risk. But what IMF says, is not something to ignore entirely. With bitcoin, one cannot have a stable position. It's either up or down! That's what the major concern is!

SFR10

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Quote from: https://cointelegraph.com/news/imf-issues-veiled-warning-against-el-salvador-s-bitcoin-law?utm_source=thecryptoapp

The two IMF officials alleged that countries adopting cryptocurrencies as national currencies or “granting cryptoassets legal tender status” risked domestic prices becoming highly unstable

There's a big difference between goods or services priced in BTCitcoin and sellers accepting it as an additional option ^{[the latter one doesn't lead to the highlighted part]}.

After reading their "blog post", it's quite clear they're are trying to highlight its cons ^{[there's a workaround for all of them]} while also portraying it in a way that it's not ^[SMH].

dkbit98

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It looks to me that International Monetary Fund is really scared of losing it's world domination and ability to blackmail all countries, forcing them into debt, hyperinflation and destroying economies worldwide, but all of the sudden they care about people and money laundering. Cheesy

Let's face it, BTC experiments like El Salvador will continue with more countries and there is nothing IMF or anything else can do to stop it, and they will try everything they can, legally and illegally...

Nathrixxx

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Am update on International Monetary Fund (IMF) versus El Salvador's bitcoin might interest you with this...

Quote

|Making any cryptocurrency a national currency “is an inadvisable shortcut” to more inclusive financial services, according to two IMF officials.

For further readings
https://cointelegraph.com/news/imf-issues-veiled-warning-against-el-salvador-s-bitcoin-law?utm_source=thecryptoapp

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