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IMF finds in its study that giving citizens more options for their savings, like cryptocurrencies, is going to force central banks to strengthen their monetary
by miohtama 3y ago
IMF finds in its study that giving citizens more options for their savings, like cryptocurrencies, is going to force central banks to strengthen their monetary policies. Before money was the monopoly right of the state. No longer. Thus if there is an option for better money over central bank money it's likely people will switch. This can explain some of dislike central banks have for cryptocurrencies.
https://www.imf.org/en/Publications/fintech-notes/Issues/2023/12/05/Macro-Financial-Implications-of-Foreign-Crypto-Assets-for-Small-Developing-Economies-541440 https://www.imf.org/en/Publications/fintech-notes/Issues/202...
- ano-ther 3y agoInteresting study. It’s not about “dislike” or “better money” but central banks’ (democratic) mandate for a balanced monetary policy, which gets more challenging if you have large capital flows via crypto. > This underscores that widespread crypto adoption can weaken policymakers’ available options for mitigating external shocks and potentially increase cross-country spillovers.
- miohtama 3y agoThank you for a good comment. It’s dislike in a sense that it exposes the impotence of central bankers, and any hocus pocus cannot fix the underlying issues. No one likes the fact that your work is being criticised, you need to work harder or in the worst cases you just cannot lie to your people. The examples here include Argentina, Turkey and now Nigeria, where it’s possible to argue that the citizens would have been better off without a central bank in the first place. The central banking was, at least, partially the cause of the crisis and their mandate to manage balanced monetary policy was part of other public lies.