IMF Director Says Banks Need to 'Stay in the Game' as Crypto Could 'Reduce Demand for Central Bank Money'

in cryptocurrency •  22 days ago

Central bankers are feeling the heat as Bitcoin and cryptocurrency support grows. Dash is being used in over a dozen locations in New Hampshire, with more locations supporting other cryptocurrencies as well. Instead of people spending the nationally-controlled currency, they are being drawn towards crypto, and this means they operate independently of central banks who control the normal money that's printed.


Source

Money is evolving, and the traditional power structure is losing control. Central banks are a credit-based system of relationships between it, the commercial banks and the citizens. Cryptocurrencies bypass all of those established powers and let people use crypto as money to spend, but also as a valuable commodity that can be traded itself.

Dong He is the Deputy Director of the IMF’s Monetary and Capital Markets Department, and he recognized the value of crypto assets:

Crypto assets may one day reduce demand for central bank money

"As a medium of exchange, crypto assets have certain advantages. They offer much of the anonymity of cash while also allowing transactions at long distances, and the unit of transaction can potentially be more divisible. These properties make crypto assets especially attractive for micro payments in the new sharing and service-based digital economy." IMF Monetary Policy

As it stands, crypto is seen as too volatile and too much of a risk to pose an existential threat to central banks. Citizens in countries have a developed trust in the central banks and their fiat currencies, while they don't have the same trust in cryptocurrencies. Cryptos have garnered an infamous public reputation for a history of hacking, security breaches, fraud, other operational failures and dark nefarious black market activity like drugs and other criminal activity.

Although this trust is illusory, as people would not likely trust the banks if they knew the swindle that was being done to them. As Henry Ford is quoted saying:

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.


Source

Cryptocurrency blockchain financial technology has time to further develop and refine itself into a more secure financial tool and gain more acceptance. Central banks are seeing the potential, and plan to adopt the new fintech to "stay in the game":

"Central banks must maintain the public's trust in fiat currencies and stay in the game in a digital, sharing, and decentralized service economy. They can remain relevant by providing more stable units of account than crypto assets and by making central bank money attractive as a medium of exchange in the digital economy." IMF Monetary Policy

Central banks are going to fend off the competitive pressure of non-central bank cryptocurrencies by learning from crypto and integrating crypto assets into their model. The solution that crypto brings to the digital world can't be ignored for long. Instead of denial and resistance, acceptance is taking shape. Fiat and crypto fintech will merge to try to make a more stable crypto asset that will be more attractive and be more trusted by common folk.


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I'd like to believe they feel crypto's threatening them...truth is if they did, they'd be outlawed already. Can't help but feel it's all part of the plan...

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Several countries and banks have tried outlawing it. It can't be outlawed. Trying to do so backfires. They are too greedy anyway. They figure they can simply buy or corrupt it to make huge profits. By the time they realize they are losing too much control it will be too late.

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I think a bit of skepticism is healthy when it comes to "adoption" concerns of large banking institutions. "They figure they can simply buy or corrupt it to make huge profits." This is exactly what I'm talking about. Whether or not the can or can't outlaw such technologies is yet to be seen. Many govt's are actively FINDING ways to track/trace ID's of those who use crypto's. Ever heard of the great firewall of China?

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The blockchain is too value to be banned. If a lot of countries get together and ban it there will still be many more that don't, and those ones that don't will get the massive benefits of blockchain tech. You would need worldwide consensus to ban crypto, but the whole point of crypto and decentralized tech is that worldwide consensus is impossible.

The establishment will try to bend crypto to their will time and time again, and they will succeed many times, but in the end the blockchain (open source white-hat hackers) can evolve much faster than governments can.

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That is for sure. Those white-hats doh! I don't think I've explained what I mean by "ban" very well. See all blockchains that aren't sanctioned by GOVT'S are banned. Their blockchains are safe and reliable etc....
Blockchain is much too valuable, this is for sure, but whose blockchain will be the point of interest. I am on your side btw, just need to be real about what's coming ;). I always joke that nerds are taking over the planet....Turns out it wasn't a joke!! lol

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In the spirit of decentralization there is no single point of interest. Each community gets a crypto and controls it directly. Maybe this is an unattainable pipe dream. Who knows.

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It is if not nurtured and cherished....

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This is actually one of the reasons why I think a lot of privacy coins are massively undervalued. In my eyes, Monero is absolutely superior to Bitcoin. Dash is also a very interesting project.

Amazon has even locked in a patent for data-basing all relevant blockchain information and selling that information to the highest bidder. You can be damn sure more people are going to be looking for privacy when that technology starts delivering results.

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I know I do. The disturbing part is, no one is really that outraged to learn about any privacy issues. Just look at what Ed Snowden revealed about gov't spying programs, FB still exists and is showing a very minor slowdown in use.
These issues are constantly poo-poo'd by your average person. When massive adoption comes to crypto, this mindset WILL follow in my unfortunate belief.

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I know the feeling. These parasites are so sneaky and stealthy.

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yup, I have to agree with you...'they' have had the time, the resources, and all the technology - years before 'we' were even aware it existed.

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I just don't want those who believe to be naive about what this is or could become. These technologies have the ability to free or enslave us all. I'll give you one guess which one the IMF is pulling for ;). Not trying to FUD, just need to be aware of the implications of "outdoing" the IMF at it's own game. Be very certain Ms. Legarde is being more than coy about her statement.

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Largely agree with you my friend. See my comments below if you want to dig deeper into the matter.

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Humanity is already enslaved. There is nothing to lose. The ruling class has grown fat and weak. They've never had a fair fight before.

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Fat. Ok, but weak they are not.
"Let me issue a nation's money and I care not who writes it's laws"
--Mayer Amschel Rothschild--

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Seems pretty relevant considering the blockchain is attempting to issue currencies that no one controls.

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Attempting to issue money that no one controls (or that central bankers don't control) is why wars are waged already. These men/women are not stupid. It is important not to underestimate them. Their grip won't loosen easily.

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Right, but who do you go after when it's not a centralized entity issuing the currency? There is no one for them to attack. Also, why attack something superior when you can just buy your way in?

Their grip will loosen over time as everyone benefits from the Age of Abundance.

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I see three question marks but I don't know what you're asking.

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The presumption of a 'fair fight' seems a little strange, is all.

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Indeed it is. I wasn't trying to say that blockchain tech is going to bring a fair fight to the establishment. The odds are still tilted. I'm simply hoping that hubris will be their downfall.

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Absolutly.
An 'eyes wide open' shafting, is much less psychologically damaging...
😂

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lol! He said shaft! ;)

It "could reduce the demand for central bank money..."

Um, so, yeah... I'm pretty sure that's one of the main features of doing things with crypto rather than the banks...

We were taught there was only one way growing up: fiat currency, everything is taxed, banking supports everything and to step outside of that paradigm is illegal.

What's actually illegal is the central banking system to begin with. Freedom belongs to those who can decide for themselves and then take action on it.

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Yup, it's all a scam and scheme. We have a great opportunity in our coming years to see real change to the established order

Good post. I hope you are correct - do you not think the central banks are already fully in the game..?

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A lot of rich people could have easily been major buyers in so many cryptos... the banksters can control everything potentially... mayb e they were short sighted and though they didn't need to and could control it all... I don't know.

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the banksters can control everything potentially... maybe they were short sighted...

While I would love to see that as a possibility, I can't honestly say that I can think that - not without sounding (in my own head) like a naive 3 year old....

I hope I'm so wrong....
Sincerely.

Despite all the negativity associated as cited in the post, the world is gradually accepting cryptos this the central banks can not ignore

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Indeed, they can fight it, but can they stop it?

how is this different from people buying shares of a company and funding there development and in return getting a share in there future growth.

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In other words. Very different!

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It's open source and is worldwide based on community with very low overhead.

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Currency is more than a decentralized ledger. Its something reorganized and backed by someone. USD is backed by GDP of US. Lot of other are backed by gold or oil.

What is bitcoin backed by?

Don't get me wrong, bitcoin has gained enough traction to become a asset class but its not a currency.

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USD is backed by the Federal Reserve. It's controlled by an oligarchy. They get to print money out of thin air and loan it with interest. More money is owed to the Federal Reserve than there is money in existence. The Federal Reserve is a very complex pyramid scheme designed to enslave the population through never-ending debt. It is an economy based on growth (like a cancer) instead of one based on balance. Even the name Federal Reserve implies that the Federal Government controls it. Don't be fooled, because this is not the case.

Bitcoin and other blockchains are backed by decentralized trust. The rules are enforced by encryption and the fact that no centralized entity can change the rules. There needs to be community consensus to change anything. Decentralized blockchain currencies are absolutely superior to centralized currencies.

Fiat currencies are so corrupt and full of friction (middle men) that they have given the blockchain value simply from the trustless environment that blockchain provides. Once the blockchain starts creating jobs and people are paid in crypto and vendors accept crypto the need for fiat currency will be zero.

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Once the blockchain starts creating jobs and people are paid in crypto and vendors accept crypto the need for fiat currency will be zero.

That's the main thing. Currency is something that people believe has value. A medium of exchange. But bitcoin is not used as currency. Merchants who do accept it, convert it right away to fiat. If you make a purchase in bitcoin, you have pay taxes on the purchase because bitcoin is categorized as immovable asset. US has lot of people with mobiles or computers and things online. But most of the countries in Asia are still trade in paper money. How will those get onboard.

Bitcoin will pave the way for something great. I think of it as myspace of social networking.

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I just learned about an ERC-20 token today called Dai. It's pegged to $1 but still manages to stay decentralized. A coin like this makes vendor adoption much easier to implement. 99.999...% of the world has no idea that Dai even exists.

The cryptosphere is massively underdeveloped right now, but at the same time it's very complicated while still managing to get developed at exponential speeds. It will be much more obvious where this is all going in five or ten years when the dust settles and the wild west phase is over.

My experience with people who are constantly referencing Bitcoin is that they've barley even scratched the surface when it comes to understanding the tech. Bitcoin is already old news there is so much information out there it's insane. Maybe I'm just bearish on Bitcoin who knows.

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You do realize the problem with something pegged to USD. Inflation of USD also gets pegged with that token. So in future when dollar loses value so does Dai. USDT is also pegged to a dollar but who knows if they even have that many dollars in their vaults now. Just a though.

I think cryptos will be real when people won't talk in terms of their fiat price. 1 bitcoin is not equal to 7k, it should be equal to 3 mac books or 7 iphones.

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Haha ok you're totally fucking with me playing devil's advocate now.

The value of a pegged asset is not for a store of value. Everyone knows USD loses value over time. The value of a pegged asset is to avoid bearish losses and get vendors to accept crypto as payment because they cry all day about volatility.

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They don't tax it :P

Thankfully there is more acknowledgment of crypto in the mainstream realm. It’s the one of the last methods of denial before it’s more widely accepted by all. They are probably frustrated beyond belief.

Governments and central banks are always comfortable when they are in total control and can manipulate the situation. Crypto offers a different ball game altogether.

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Yup, they want to control, but will they be able to pull it off..

Isnt bitcoin supposes to be a medium for exchange? Or a way to remove banking and third parties that makes transactions expensive. To me its a medium to exchange value over the internet, but the value is still ultimately decided in a fiat currency and that isnt going to change anytime in the near future. And even in the future if value is defined in bitcoin, how do i buy bitcoin? What other item of value do i exchange to own bitcoin other than fiat?

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The blockchain is great at cutting out the middle man. It will create jobs And you'll be able to pay for things and get paid directly with it. Soon, the need for fiat will be completely outdated entirely.

However, the greatest asset of crypto isn't any of these things. It's the ability for communities to fully control their own currency that truly matters. Decentralization of corrupt power consolidation is likely the most important thing we could do in our lifetimes.

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You could potentially go to an exchange, and exchange gold, silver, fiat for bitcoin. If there is only crypto, then your work will pay you in crypto anyways...

Hi, I'm new to this platform. God bless your work and keep growing physically and mentally, I hope you go through my blog and follow me @carlosdap11 I follow you too