He International Monetary Fund (IMF) He has expressed his understanding of the benefits of cryptocurrencies, albeit few, but remains skeptical of public blockchains.
Financial advisor Tobias Adrian, together with the head of the capital markets and currency division Tommaso Mancini-Grifoli, wrote a post that begins by stating that “crypto assets have been more of a disappointment than a revolution for many users.” Especially since private money issuers cannot be trusted to protect actual investors and users.
In the text, the IMF authors suggested that leveraging more private blockchain networks could be “more transformative than the initial wave of cryptocurrencies.” Private blockchain networks, as opposed to public blockchains like Ethereum, can help streamline payments and settlements while increasing security and compliance, the authors claim.
“While the private sector pushes the boundaries of innovation and customization, it does not guarantee that transactions are secure, efficient and interoperable, even if they are well regulated. Rather, the private sector is likely to create client-only networks to exchange assets and make payments.”
Open ledgers can link private networks like those maintained by banks and other financial institutions, “but are likely to lack standardization and sufficient investment, given the limited profit potential. Furthermore, the use of private forms of money to settle transactions would put counterparties at risk.”
Cryptocurrencies and CBDC: opinion of the IMF
The CBDC have the potential to become a safe and useful public good, points to the textadding that these currencies could act as secure payment methods and as stores of value.
“As a monetary instrument, CBDC provides security; alleviate counterparty risk and provide liquidity in payments. But as infrastructure, CBDC could bring interoperability and efficiency between private networks for digital money and even assets.”
The authors give little credit to the power that tokenization of stocks, bonds, and other assets can bring—namely, the reduction of trade cuts and the expansion and integration of markets.
“But paying for such assets will require money on a compliant ledger,” they said, like stablecoins, “to the extent they comply with regulation.” The authors also consider that bank proofs of tokenized checking accounts may be more important.
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