06 Jun 2018 Jane Whitmoore
Bitcoin’s Innovation Recognized by the International Monetary Fund
The report focuses on the Bitcoin technology and alternative cryptocurrencies. According to the IMF, the future sees massive adoption of the innovative payment technology and is likely that the crypto resources will lessen the interest for the fiat monetary forms, especially in the private e-commerce networks.
Christine Lagarde, the Managing Director of the IMF, praised the cryptocurrencies developments, saying that in seven to ten years’ time the Bitcoin is likely to be used widely, adding: “We can't simply close our eyes to the chance that some crypto resources will, in the long run, be more in use than traditional payment systems. Cryptocurrencies already have what it takes to eliminate cash in its present form in some areas of the world or the ecosystem of the largest online retailers.”
An important note in the report comments on the economic crisis due to the volatility of the crypto market. Banks remain skeptical towards cryptocurrencies because some of their clients feel insecure about Bitcoin, Ethereum, and Ripple, as there is plausibility that virtual cash can influence the bricks-and-mortar global financial policies.
"Currently Bitcoin has a serious strength against the dollar, and that’s the expanding market. Such a move could predict a whole new approach when it comes to creating money in the digital age: from credit cash to commodity cash, we may go back in time and trade cash as goods, just like in the Renaissance," clarifies the IMF report.
Financial specialists keep on debating the sources of cash, and why fiscal frameworks appear to have exchanged amongst commodity and credit cash all through history. On the off chance that crypto resources, in reality, prompt a more distinct part for product cash in the advanced age, the interest for national bank cash is probably going to decay and eventually disappear.
The IMF paper took emphasis on how banks meet the new form of competition and that they should keep on solidifying fiat monetary forms as a "unit of account." Cryptocurrencies, in any case, experience considerable difficulties turning into a standard unit of record, the IMF notes, and the reason is that "a monetary value is to a great extent a form of convictions that are very changeable" which has made the greater part of digital monetary forms volatile in the short run.
The paper concludes that national banks could balance with their own digital monetary forms. They have to accept that there are many opportunities and difficulties on the horizon. However, they should rebuild their customers’ trust to stay afloat.Bitcoin Cryptocurrency International Monetary Fund