• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Markets Cryptos

Cryptoassets as national currency is a step too far – IMF

Ajibola Akamo by Ajibola Akamo
August 29, 2021
in Cryptos, Markets, Spotlight
IMF revises Nigeria GDP growth to 3.2% from 3.1% due to improved fight against Oil theft
Share on FacebookShare on TwitterShare on Linkedin

The International Monetary Fund (IMF), an organization which includes 190 countries, working to foster global monetary cooperation, in a blogpost titled, ‘Cryptoassets as National Currency? A Step Too Far’, believes that the adoption of cryptocurrencies as national currencies has more risks and cost that outweighs potential benefits.

The blogpost started by acknowledging the potential benefits of digital currencies stating, “New digital forms of money have the potential to provide cheaper and faster payments, enhance financial inclusion, improve resilience and competition among payment providers, and facilitate cross-border transfers.”

However, according to the post, the IMF believes that the adoption of digital currencies is not straightforward as it requires a lot of difficult policy choices such as clarifying the role of the public and private sectors in providing and regulating digital forms of money.

RelatedStories

What does liquidity mean in crypto? 

What does liquidity mean in crypto? 

May 23, 2025
Learn why Nosh is the best platform to sell crypto in Nigeria and how to easily exchange your crypto

Learn why Nosh is the best platform to sell crypto in Nigeria and how to easily exchange your crypto

May 20, 2025

The post went further to say that some countries will be tempted to view these cryptoassets as legal tender which they termed a ‘shortcut’ because of the benefit they provide. They stated, “Some countries may be tempted by a shortcut: adopting cryptoassets as national currencies. Many are indeed secure, easy to access, and cheap to transact. We believe, however, that in most cases risks and costs outweigh potential benefits.”

The post spoke about the volatile nature of cryptocurrency assets by using Bitcoin’s price crash in May as an example to further buttress their point. On this, they stated, “Their value can be extremely volatile. Bitcoin, for instance, reached a peak of $65,000 in April and crashed to less than half that value two months later.”

The post also expressly differentiates cryptocurrency assets from Central Bank Digital Currencies (CBDC) stating, “Cryptoassets are thus fundamentally different from other kinds of digital money. Central banks, for instance, are considering issuing digital currencies—digital money issued in the form of a liability of the central bank.”

The IMF believes that because of the volatile nature of cryptoassets, they are unlikely to catch on in countries with stable inflation and exchange rates, and credible institutions, as their households and businesses would have very little incentive to price or save in a parallel cryptoasset even if it were given legal tender or currency status. It stated that even in relatively less stable economies, the use of a globally recognized reserve currency such as the dollar or euro would likely be more alluring than adopting a crypto asset. It stated, “a crypto asset might catch on as a vehicle for unbanked people to make payments, but not to store value. It would be immediately exchanged into real currency upon receipt.”

Potential Effects of Adoption of Crypto Assets According to the IMF

It states that the adoption of cryptocurrency assets will likely affect macroeconomic stability. On this, it stated, “If goods and services were priced in both a real currency and a crypto asset, households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities. Similarly, government revenues would be exposed to exchange rate risk if taxes were quoted in advance in a crypto asset while expenditures remained mostly in the local currency, or vice versa.”

Another point raised is that monetary policies will be ineffective. It stated, “Central banks cannot set interest rates on a foreign currency. Usually, when a country adopts a foreign currency as its own, it “imports” the credibility of the foreign monetary policy and hope to bring its economy–and interest rates–in line with the foreign business cycle. Neither of these is possible in the case of widespread crypto asset adoption.”

The next point raised it’s the effect on financial integrity. On this the report stated, “Without robust anti-money laundering and combating the financing of terrorism measures, cryptoassets can be used to launder ill-gotten money, fund terrorism, and evade taxes. This could pose risks to a country’s financial system, fiscal balance, and relationships with foreign countries and correspondent banks.”

They looked at the potential legal issue countries could face stating, “Legal tender status requires that a means of payment be widely accessible. However, internet access and technology needed to transfer cryptoassets remains scarce in many countries, raising issues about fairness and financial inclusion.”

Finally, the IMF spoke about the energy requirement of mining stating, “mined cryptoassets such as Bitcoin require an enormous amount of electricity to power the computer networks that verify transactions. The ecological implications of adopting these cryptoassets as a national currency could be dire.”

Bottomline

Although the IMF standpoint concludes that “attempting to make cryptoassets a national currency is an inadvisable shortcut,” it also acknowledges that the advantages of their underlying technologies, including the potential for cheaper and more inclusive financial services, should not be overlooked. The IMF believes that world governments need to do better in terms of providing these services and leveraging new digital forms of money while preserving stability, efficiency, equality, and environmental sustainability.

Tags: CryptocurrencyIMFInternational Monetary Fund
Ajibola Akamo

Ajibola Akamo

Ajibola Akamo is an Investment Analyst, Financial Analyst, Economist and Accountant. You may contact him via his email ajibolaakamo@yahoo.com

Related Posts

What does liquidity mean in crypto? 
Opinions

What does liquidity mean in crypto? 

May 23, 2025
Learn why Nosh is the best platform to sell crypto in Nigeria and how to easily exchange your crypto
Companies

Learn why Nosh is the best platform to sell crypto in Nigeria and how to easily exchange your crypto

May 20, 2025
Nigeria vs the World Bank: Truth, Myths, and Money Moves – Drinks and Mics
Digital Media

Nigeria vs the World Bank: Truth, Myths, and Money Moves – Drinks and Mics

May 17, 2025
IMF projects reduced economic growth for Sub-Saharan Africa
Economy

Surging electricity demand for AI could create new challenges for global economy – IMF 

May 14, 2025
Tinubu appoints Omolola Bridget Oloworaran as new PenCom DG  
Economy

Nigeria exits IMF debtor list amid Tinubu’s fiscal reform push 

May 8, 2025
At IMF Nigeria is winning praise, but the money isn’t flowing—this is why  
Op-Eds

At IMF Nigeria is winning praise, but the money isn’t flowing—this is why  

April 30, 2025
Next Post
CBN reduces over-the-counter withdrawals to N100k, N500k per week for individuals, companies

CBN drafts guidelines to Nigerian banks on e-Naira

Comments 2

  1. ADETOKUNBO ONIKOSI says:
    September 5, 2021 at 4:34 pm

    Cryptoassets generally should contemplate riding on a New “Cryptolegalsystem” that will analyze all the technical scenarios for development, there is no doubt that Money is on a novel electronic frontier and therefore innovative technology and legal solutions need to be brought to bear. The Space age never contemplated in its first phase satellite debris falling out of space to impact the territory of another Nation but with time international law was able to resolve conflicts for the Last frontier of human endeavor.

    Reply
  2. ทางเข้า PGSLOT says:
    September 24, 2021 at 12:06 pm

    “Pgslot games new style with 3D animations and beautiful effects From Pgsoft
    You can visit website before deciding to join the game here pgslot
    There are 200 games to choose from in different ways with many great prizes. Don’t worry about safety , We have a standardized safety system. can be easily checked.”

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank
Zenth Bank








DUNS

Recent News

  • Wedex 2025—One day, one house, one goal
  • Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 
  • Anambra Govt acquires land in Aguata, Orumba for new industrial city 

Follow us on social media:

Recent News

Wedex 2025—One day, one house, one goal

Wedex 2025—One day, one house, one goal

June 12, 2025
Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 

Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 

June 12, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics