A new paper from the International Monetary Fund (IMF) suggests that cash and bank deposits could be left behind as digital money and fiat-pegged cryptocurrencies see greater adoption. The Fintech Note, titled “The Rise of Digital Money” and published Monday, looks at how tech firms are increasingly competing with major banks and credit card companies. The author’s write in the introduction: “Digital forms of money are increasingly in the wallets of consumers as well as in the minds of policymakers. Cash and bank deposits are battling with so-called e-money, electronically stored monetary value denominated in, and pegged to, a currency like the euro or the dollar.” Ultimately, cash and bank deposits “will face tough competition and could even be surpassed” by these new forms of value transfer, the paper warns. Growing in popularity, forms of e-money like stablecoins “may be more convenient as a means of payment,” but the authors question the stability of their value. “It is, after all, economically similar to a private investment fund guaranteeing redemptions at face value. If 10 euros go in, 10 euros must come out….
The latest annual report of the International Monetary Fund has concluded that cryptocurrency does not pose a threat to global economic stability. Or at least not yet.
The International Monetary Fund (IMF) and the World Bank have launched a crypto token called “Learning Coin” to better understand how blockchain technology works. The two institutions said that the coin would have no monetary value and would not be made openly available, the Financial Times reported Saturday. To support the token, the IMF and the World Bank have also launched a private blockchain network. The project is aimed to build “a strong knowledge base” around blockchain technology among staff at the organizations. The IMF said in the report: “The development of crypto-assets and distributed ledger technology is evolving rapidly, as is the amount of information (both neutral and vested) surrounding it. This is forcing central banks, regulators and financial institutions to recognize a growing knowledge gap between the legislators, policymakers, economists and the technology.” Also launched as part of the token project is a Learning Coin app, allowing users to share content like blogs, research, videos and presentations. Staff at the organizations will also be able to “earn” coins for achieving certain educational milestones. While the token has no real-world value, the developers…