What Happened: A recent report from the International Monetary Fund (IMF) states that cryptocurrencies pose more risks than benefits when it comes to adopting it as legal tender.
In a recent blog, IMF officials Tobias Adrian and Rhoda Weeks-Brown concluded that attempting to make cryptocurrencies a national currency was an inadvisable shortcut.
“Bitcoin and its peers have mostly remained on the fringes of finance and payments, yet some countries are actively considering granting cryptoassets legal tender status, and even making these a second (or potentially only) national currency (sic),” said the officials in the blog.
Adrian and Weeks-Brown are likely referring to El Salvador, which has already passed a law making Bitcoin BTC/USD legal tender.
The law will officially take effect in September, despite a vast majority of citizens disapproving of the plan.
According to IMF officials, “the most direct cost of widespread adoption of a cryptoasset such as Bitcoin is to macroeconomic stability.”
If goods and services were priced in both a real currency and a crypto asset, they argued, then households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities.
Moreover, the officials stated that government revenues too would be exposed to exchange rate risk if taxes were quoted in advance in a crypto asset while expenditures would remain mostly in the local currency, or vice versa.
“As a result, domestic prices could become highly unstable. Even if all prices were quoted in, say, Bitcoin, the prices of imported goods and services would still fluctuate massively, following the whims of market valuations,” explained the IMF officials.
Price Action: Bitcoin saw a high of $64,800 earlier this year, but has since lost nearly half its value.
At press time, the market leading cryptocurrency was trading at
What Happened: A recent report from the International Monetary Fund (IMF) states that cryptocurrencies pose more risks than benefits when it comes to adopting it as legal tender.
In a recent blog, IMF officials Tobias Adrian and Rhoda Weeks-Brown concluded that attempting to make cryptocurrencies a national currency was an inadvisable shortcut.
“Bitcoin and its peers have mostly remained on the fringes of finance and payments, yet some countries are actively considering granting cryptoassets legal tender status, and even making these a second (or potentially only) national currency,” said the officials in the blog.
Adrian and Weeks-Brown are likely referring to El Salvador, which has already passed a law making Bitcoin BTC/USD legal tender. The law will officially take effect in September, despite a vast majority of citizens disapproving of the plan.
According to the IMF officials, “the most direct cost of widespread adoption of a cryptoasset such as Bitcoin is to macroeconomic stability.”
If goods and services were priced in both a real currency and a cryptoasset, they argued, then households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities.
Moreover, the officials stated that government revenues too 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.
“As a result, domestic prices could become highly unstable. Even if all prices were quoted in, say, Bitcoin, the prices of imported goods and services would still fluctuate massively, following the whims of market valuations,” explained the IMF officials.
Price Action: Bitcoin saw a high of $64,800 earlier this year, but has since lost nearly half its value. At press time, the market leading cryptocurrency was trading at $37,619 after losing 2.59% over the past 24-hours.v
What Happened: A recent report from the International Monetary Fund (IMF) states that cryptocurrencies pose more risks than benefits when it comes to adopting it as legal tender.
In a recent blog, IMF officials Tobias Adrian and Rhoda Weeks-Brown concluded that attempting to make cryptocurrencies a national currency was an inadvisable shortcut.
“Bitcoin and its peers have mostly remained on the fringes of finance and payments, yet some countries are actively considering granting cryptoassets legal tender status, and even making these a second (or potentially only) national currency,” said the officials in the blog.
Adrian and Weeks-Brown are likely referring to El Salvador, which has already passed a law making Bitcoin BTC/USD legal tender. The law will officially take effect in September, despite a vast majority of citizens disapproving of the plan.
According to the IMF officials, “the most direct cost of widespread adoption of a cryptoasset such as Bitcoin is to macroeconomic stability.”
If goods and services were priced in both a real currency and a cryptoasset, they argued, then households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities.
Moreover, the officials stated that government revenues too 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.
“As a result, domestic prices could become highly unstable. Even if all prices were quoted in, say, Bitcoin, the prices of imported goods and services would still fluctuate massively, following the whims of market valuations,” explained the IMF officials.
Price Action: Bitcoin saw a high of $64,800 earlier this year, but has since lost nearly half its value. At press time, the market leading cryptocurrency was trading at $37,619 after losing 2.59% over the past 24-hours.
What Happened: A recent report from the International Monetary Fund (IMF) states that cryptocurrencies pose more risks than benefits when it comes to adopting it as legal tender.
In a recent blog, IMF officials Tobias Adrian and Rhoda Weeks-Brown concluded that attempting to make cryptocurrencies a national currency was an inadvisable shortcut.
“Bitcoin and its peers have mostly remained on the fringes of finance and payments, yet some countries are actively considering granting cryptoassets legal tender status, and even making these a second (or potentially only) national currency,” said the officials in the blog.
Adrian and Weeks-Brown are likely referring to El Salvador, which has already passed a law making Bitcoin BTC/USD legal tender. The law will officially take effect in September, despite a vast majority of citizens disapproving of the plan.
According to the IMF officials, “the most direct cost of widespread adoption of a cryptoasset such as Bitcoin is to macroeconomic stability.”
If goods and services were priced in both a real currency and a cryptoasset, they argued, then households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities.
Moreover, the officials stated that government revenues too 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.
“As a result, domestic prices could become highly unstable. Even if all prices were quoted in, say, Bitcoin, the prices of imported goods and services would still fluctuate massively, following the whims of market valuations,” explained the IMF officials.
Price Action: Bitcoin saw a high of $64,800 earlier this year but has since lost nearly half its value.
At press time, the market-leading cryptocurrency was trading at $38,428, up 2.43% over the past 24-hours.
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