“Cryptocurrency Promises Are Not Reality,” IMF Says

“Cryptocurrency Promises Are Not Reality,” IMF Says

For the International Monetary Fund, the IMF, the promises of cryptocurrencies do not match the reality presented so far, attacking several points in a new article published by the agency.

The text, entitled “The Superficial Fascination of Cryptocurrencies,” was written by Hilary Allen, a professor at the American University Washington College of Law.

During her lengthy article, she urges regulators to do their best to end cryptocurrencies or reduce their impact on the banking world.

“Cryptocurrencies prefer ransomware and expend a lot of energy,” says article published by IMF

To criticize Bitcoin, which emerged just 14 years ago, American professor Hilary Allen used two initial arguments.

One is that Bitcoin and other cryptocurrencies consume a lot of energy for their operation. As the second item on the list, she mentions that ransomware-type cyberattacks are on the rise because of decentralized digital currencies.

“In the 14 years since Bitcoin emerged, proponents have made promises that the cryptocurrency would revolutionize money, payments or finance – or all of the above. These promises remain unfulfilled and seem increasingly impossible, but many policymakers have readily accepted them and support cryptocurrency experimentation as a necessary step towards a fuzzy and innovative future.”

As the writer published in her article published by the IMF, even emphasized on social networks, bitcoin promises a false decentralization and democracy, which she deems illegitimate.

“Economic crises are political and cryptocurrencies are not going to solve it”

During her explanation of crises in the economy, the American professor said that cryptocurrency companies are defending this as protection, and making accusations very clearly.

She acknowledges that the banking industry has struggled in recent years, but cryptocurrencies are not going to solve this situation, Hilary Allen said in her review.

That is because, for her, the problem of financial crises is a political problem, which is better solved in solutions of centralized technologies, where the state has more control.

“In an era of increasing political dysfunction, it’s understandable that policymakers would want to believe that technology can fix things without their intervention. Unfortunately, cryptocurrencies do not live up to their claim of decentralization, and the ups and downs of cryptocurrencies can have far-reaching economic consequences if they are integrated into the traditional financial system and are able to disrupt the flow of capital to the real economy.”

“Policymakers should not be guided by dubious promises of decentralization,” says article

In his conclusion, Allen ends by saying that government policies regarding cryptocurrencies must be strict, to prevent them from affecting the traditional financial market.

According to the anti-cryptocurrency professor, “a firewall should be created between the crypto and traditional markets”. The priority, she said, would be to prohibit banks from trading cryptocurrencies for their customers, especially stablecoins.

Current laws can already lead to banks being banned, i.e. there is no need to change banking law to create a barrier to cryptocurrencies.

So, the article published by the IMF on Wednesday (7)an independence day in brazil, calls for serious scrutiny of cryptocurrencies.

“Ultimately, policymakers should not get carried away by dubious promises of decentralization and democratization; they must be proactive in stopping the negative effects of cryptocurrency. The architects of the future of finance have many problems to solve and must come up with the simplest and most direct solutions. Trying to adapt crypto assets and blockchains to solve these problems is likely to make things worse.”

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