IMF (International Monetary Fund) revealed its worries about cryptocurrencies, including Bitcoin (BTC), which are acquiring the status of the national currencies, as stated in a tweet connected with its blog post on 29th August. Particularly, the tweet mentioned that there are a lot of substantial risks in utilizing cryptocurrencies. It is an unwise shortcut to give crypto assets a position of national currency. In this situation, IMF is seemed to be very much apprehensive about the constantly increasing figure of the countries like El Salvador that are recognizing BTC as a legal tender and incorporating it as their native currency, as well as the influence made by such moves on the global system of finance.
Recently, Honduras incorporated the earliest crypto ATM during this week, whereas Cuba has turned to be the latest country to accept as well as regulate the cryptos like Bitcoin. While recognizing cryptos, it may be possible for Cuba to evade the restrictions which have been imposed on it by the United States as the island is prohibited from making any commerce as well as remittances to cross-border companies.
The tweet further stated that the shortcut lures some countries to take the step and accept crypto assets as their national currencies, and a lot of them are certainly cheap in transactions, easily accessible, and secure. Nonetheless, the organization believes that in the majority of cases, some costs and risks overshadow the potential advantages.
Crypto adoption is complicated
Although it was mentioned in the blog post that cryptocurrencies are capable of elevating the financial status, enhancing the competitiveness between the payment providers, as well as permitting international transactions. It additionally pointed out that crypto adoption does have a lot of complexities which make it more difficult than it appears to be.
For example, it specifies that huge costs and hard-hitting decisions are included in it as describing and distinguishing between the private and public sector role in regulating and supplying digital assets. Another complication is the fluctuation in crypto value, especially in the case of Bitcoin, which heightened at $65,000 in April and then plunged to half of it in the next couple of months.
Ecological allegations of IMF can be horrible
The post expressed that extreme consumption of energy by Bitcoin to verify the transactions presents some dire threats to the ecological conditions of any country. The post referred to Elon Musk’s rejection of BTC and elaborated on the dangerous consequences of using it.