- The IMF has not given up its efforts to warn folks against Bitcoin (BTC).
- Earlier it urged El Salvador to give up on Bitcoin, but now it asks the world to do it.
- Despite these warnings by the IMF, the asset class continues to grow and also contributed highly to the Russia-Ukraine war.
On one hand, where some entities are vehement supporters of Bitcoin and its adoption, there are still a few who are firm critics of the flagship cryptocurrencies and others in the sector.
Does Bitcoin Pose A Danger For Standard Finance?
And here, the International Monetary Fund (IMF) is worried about the increasing Bitcoin frenzy and adoption worldwide. As it thinks that the increased Bitcoin usage tags along some danger to the standard financial systems of the world.
Earlier, while El Salvador adopted BTC as its legal tender, the IMF warned the nation against such acts. However, the nation continues to carry out the financial activities via Bitcoin and is doing quite well, despite constant concerns by the IMF.
But the agency did not give up its efforts to convince folks that Bitcoin has risks, as it now urges not only El Salvador, but the whole world to give up BTC. It claims that the standard fiat currencies like USD, yen, euro, etc are at risk of getting outperformed in some ways.
The IMF further highlights that the crypto bears too many risks, as it has been seen in Ukraine post Russia’s invasion. According to the agency, Repercussions of Ukraine’s invasion by Russia and ensuing sanctions continue to reverberate globally and will test the resilience of the financial system via several channels, including acceleration of cryptoization in the markets, indirect and direct exposures of banks and nonbanks, and possible cyber-related events.
It is indeed true that crypto assets have played a vital role to aid Ukraine as the country utilized the cryptocurrencies to get support in the form of military supplies and other requirements by the army.
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Furthermore, The IMF also highlights that the risks revolving around digital assets have also increased post early time of the Covid 19 pandemic. As crypto trading has soared highly since then as people started to rely on them more than the standard fiat currencies.
A lot of folks now look at digital assets with the potential of a hedge tool. Seems like this situation of geopolitical crisis due to the Russia Ukraine war has unveiled a different nature of the cryptocurrencies as they have facilitated the innocent citizens of both the parties. It is to look forward to how the IMF further tries to warn people, and how the cryptocurrencies would evolve in the future.
Source: https://www.thecoinrepublic.com/2022/05/01/the-imf-expresses-concerns-regarding-continued-crypto-usage/