IMF Is Going to Take a Closer Look on Cryptos and Blockchain

Cryptocurrencies have shaken the world of finance. In reality, Bitcoin was a result of the 2008 crisis. The idea behind Bitcoin is to remove third parties involved when it comes to transactions. With just a limited number, it has become digital gold. In 2017, from just $1,000, it was able to reach near $20,000. And now, the regulators took notice of the crypto market. Regulators are looking to impose regulatory changes that can bring clarity in the niche.

And in 2018, things are looking bearish as regulators are looking to avoid problems related to the cryptocurrency. Unfortunately, different countries have a different reaction to cryptocurrencies. There are those countries such as Japan that welcomed cryptos while there are China and India that have imposed stricter rules and regulations towards the industry.

Cryptos and AIs

And now, the International Monetary Fund (IMF) is already taking notice. According to the IMF, it is looking to use its research and experimentation with blockchain in order to decide on the future policy on the technology.

IMF Deputy General Counsel Ross Leckow was speaking during the Singapore Fintech Festival 2018 where Ripple CEO Brad Garlinghouse was also in attendance. According to Leckow, “The IMF is devoting a lot of attention to fintech and in particular to blockchain”. He also continued saying that “But we think that it’s difficult to talk about blockchain without considering it in light of the other new technologies that are forming part of the fintech debate”.

Included in the fintech debate is artificial intelligence. He also further discussed that the IMF is continuing its research regarding cryptocurrencies and blockchain. He also mentioned that there are banks and governments that are showing considerable interest in terms of how to handle cryptocurrencies. He said that “Given the demand for advice in this area, at our annual meeting in Bali last month, we and the World Bank jointly launched an initiative called Bali Fintech Agenda, which we think is the first comprehensive framework of issues that countries need to think about when designing policy around fintech”.

IMF’s Hesitance with Cryptos?

The IMF has been wary of cryptocurrencies in the past. Last September, the IMF has warned the Republic of Marshall Islands regarding the risk of adopting cryptocurrency as its second legal tender. It was after Marshall Islands was reported to introduce digital currency as its legal tender. According to the IMF, it is going to pose a risk to the financial integrity of the country.

According to the IMF, adopting cryptocurrencies will increase the chances of losing “the last US dollar correspondent banking relationship”.

Regulatory Changes

Is the IMF going to be in favor this time around to cryptocurrencies? Or is it going to still oppose the use of cryptocurrencies?

In terms of regulations, many are hopeful that institutional investors are going to participate in the crypto market. A lot of them are waiting for the possible approval of a Bitcoin ETF. Many are looking forward towards having a Bitcoin ETF because it is predicted that it could bring in billions worth of investment from institutional investors as it makes it easier for them to join the crypto market.