Last July 29, the International Monetary Fund (IMF) released a paper titled ‘The Rise of Public and Private Digital Money’ on their official website that discussed how the IMF will use its resources to ‘monitor, advise, and help manage’ the global transition to digital currencies.
In the same document, they presented the ‘operational strategy of the IMF’ which will continue to ensure local and international financial and economic stability.
The IMF also acknowledged the benefits brought by digital assets to the present-day global markets, highlighting how ‘payments are now easier, faster, cheaper and more accessible and will cross borders swiftly.’
They also made it clear that governments and central institutions play a critical role in ‘managing the risks’ that come with them, saying that they ‘must be regulated, designed, and provided so countries maintain control over monetary policy, financial conditions, capital account openness, and foreign exchange regimes.’
In the paper, they made a distinction between central bank digital currencies, stablecoins and e-Money and focused on various crypto assets like Bitcoin (BTC). However, they explicitly noted that ‘while there are different types of digital money considered, this paper does not take a stand on which form may predominate’.
The IMF also mentioned their biggest plans and possible outputs that include the ‘surveillance, capacity development and analytical foundations’ regarding digital currencies.
To make all of their plans possible, the IMF is looking into partnering with different institutions such as central banks, regulating bodies and the World Bank while furthering their study on digital money.
In a separate blog post, IMF also discussed the ups and downs of cryptocurrencies as shown in a report by news magazine Fortune last July 29. The authors behind it were IMF’s Financial Counsellor and Director of the Monetary and Capital Markets Department Tobias Adrian and IMF’s General Counsel Rhoda Weeks-Brown.
Both Adrian and Weeks-Brown acknowledged that using crypto is suitable for cheaper and faster payments but warned that digital currency can also cause problems because of its price fluctuations, inconsistent fiscal policy and negative environmental effects.
The paper released by the IMF was a project that began in March of this year but was discussed by the IMF board in April. It was officially published to the public last July 29 to show the vision of the Fund regarding digital currencies.
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