The International Monetary Fund (IMF) does not want to legalize Bitcoin as a means of payment, but more rules. It’s a choice we have to live with.
When El Salvador decided to make Bitcoin legal tender in the country, the IMF could have seen it as an experiment. See how things are going and maybe even offer support. But that choice was not made.
Whether that matters is another question. You might think that it is ultimately about the decisions a country makes according to its own laws and that the IMF plays a supporting role as a screaming parent in the background. But as Spakenburg fans believe since yesterday, you can influence the game if you shout loud enough.
Bitcoin as legal tender
When is Bitcoin Legal Tender? This depends on the interpretation of legal tender and may vary from country to country. But usually it is a reference to a country’s local currency law that recognizes an asset to settle a debt.
With few exceptions, bitcoin is not legal tender anywhere, but it can be used in some countries as a means of exchanging goods and services.
The Dutch state does not recognize bitcoin as legal tender, but you can use bitcoin to buy services and goods in the Netherlands. This is not only possible online, but also at physical locations such as Arnhem.
We are lucky because the euro was quite stable until the Corona years. And our payment system works well too. This is not the case everywhere. El Salvador doesn’t even have its own currency, they used the US dollar for that. That means you can smell every Fed fart in El Salvador. So it is not surprising that they have opted for decentralized digital currencies in addition to the dollar.
This includes the Central African Republic, the first African nation to adopt Bitcoin as legal tender. There is no proper payment system here and few have access to banking services. Bitcoin offers both and at the same time a currency to pay with.
IMF not happy with bitcoin
The introduction of Bitcoin as legal tender has led to a lot of resistance, including from the International Monetary Fund (IMF).
Last week, the IMF released a document highlighting several reasons for not accepting cryptocurrencies such as BTC as legal tender.
The report, titled Elements of Effective Policies for Crypto Assets, provides a framework of 9 policy principles related to macro-financial, legal and regulatory issues and international cooperation.
These are the 9 rules to stop bitcoin
These are the 9 policy principles recommended by the IMF:
1 Protect sovereignty and monetary stability by strengthening the monetary policy framework and do not grant crypto-assets official currency or legal tender status.
2 Protection against excessive cash flow volatility and maintaining the effectiveness of cash flow management measures.
3 Analyze and disclose tax risks and apply clear tax treatment to crypto assets.
4 Ensure legal certainty in crypto and address legal risks.
5 Develop and enforce oversight, conduct and oversight requirements for all participants in the cryptocurrency market.
6 Establish a common supervisory framework for different national bodies and authorities.
7 Enter into international cooperation agreements to improve oversight and regulatory enforcement for crypto.
8 Monitor the impact of cryptocurrencies on the stability of the international monetary system.
9 Strengthen global collaboration to develop digital infrastructures and alternative solutions for international payments and finance.
Somewhere, of course, every sentence is a tribute to the crypto industry. Bitcoin is less than 14 years old and has no leader, organization or foundation, but it has prompted global authorities to respond.
Waiting for bitcoin international trade
How can bitcoin become successful not only as legal tender, but also as an internationally accepted currency? It is simple: more countries must accept bitcoin and there must be international trade in bitcoin. And they must specifically ignore rule 1 above.
Because if we have to talk about the current two bitcoin countries, it has no global impact. According to the Observatory of Economic Complexity, El Salvador exports only 4,000 euros to the Central African Republic, and vice versa about 35,000 euros per year.
It is waiting for large trading partners who trade and settle billions with each other in Bitcoin every year. Until then, the IMF will fight tooth and nail… on the sidelines.
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Source: Btc Direct
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
