Head of IMF Says It Is Difficult to Think in Cryptos as Money

Kristalina Georgieva, International Monetary Fund (IMF) Managing Director, stated that it is difficult to believe in Bitcoin and other Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term as money. During an event hosted by Bocconi University in Italy, Georgieva noted that central bank digital currencies (CBDCs) are the most reliable form of digital money.

The Head of the IMF branded virtual currencies as ‘de-facto assets’ as they are not backed by assets that enable price stability. “In the history of money, it is difficult to think of them as money,” Georgieva noted. “It is very impressive how much the international community, the central banks, institutions like ours are now actively engaged to make sure that in this fast-moving world of digitalization, money is a source of confidence and helps the economy function rather than (being) a risk,” she commented.

Still, she pointed out that policymakers should assess the digital currencies issue to check whether they can be considered a trustable means of exchange that the public could rely on. The comments were given in the context where she talked about Europe in proper conditions to avoid another debt crisis such as the one faced in Greece after the global financial crisis between 2007 and 2008.

IMF and Cryptos

For historical context, in the relationship between the IMF and digital currencies, in 2019, the World Bank and IMF joined forces to launch 'Learning Coin', a so-called 'quasi-cryptocurrency' with its own private Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term.

The coin has been created as a tool for IMF and the World Bank to better understand blockchain technology and how cryptocurrencies can be used. Furthermore, the Learning Coin will come with an application where research, videos, presentations and blog articles are stored. Moreover, Learning Coin holders can then redeem the coins for some 'real-life' rewards.

The test was the latest indication that the IMF was taking blockchain technology seriously, at least during that time.