While Bitcoin is about to turn 14 years from now, 4 months from now, the International Monetary Fund (IMF) is still trying to find a fast and cheap global payments system. In its latest statement, the IMF places central bank digital currencies (CBDCs) alongside stablecoins like USD Coin (USDC), stating that “tokenized money introduces a radical transformation” in the financial sector. Finally, he comments that this changes the need for trust between banks, after all they would stop working with the credit system called IOU (follow in English for ‘I owe you’), starting to use debit.
IMF seeks interconnectivity between different national currencies
While payment systems like PIX or FedNow can offer instant transactions, this only happens with their own currencies, such as real or dollar, in these cases. CBDCs, on the other hand, will not be far from that, operating only nationally, creating financial islands. With that, the International Monetary Fund (IMF) is thinking of a way to connect such currencies into a single system. The quickest idea we come up with is a blockchain like Ethereum serving as a base and national currencies serving as tokens within it.
“Things can change as money becomes tokenized; i.e. accessible to anyone with the correct private key and transferable to anyone with access to the same network”writes the IMF. “Examples of tokenized money include so-called stablecoins such as USD Coin and central bank digital currency (CBDC).”
Therefore, the IMF also believes that blockchains and stablecoins are great. Even so, it is difficult to imagine that CBDCs run on Ethereum, but rather in a closed and obviously centralized system.
“Tokenized money introduces a radical transformation that eliminates the need for trusted two-way relationships. Anyone can hold a token, even without having a direct relationship with the issuer.”
Wanting to reinvent the wheel, the IMF promises to deliver two articles about its CBDC integration platform soon. In addition, he comments that stablecoins that are already on the market could work on his new network.
Are IMF Blockchains a Threat to Cryptocurrencies?
For anyone who has ever needed to receive/send money to/from another country, you know that Bitcoin is still the best option in most cases. Therefore, such an IMF system can lower the cost of international remittances and undermine this BTC use case. Either way, Bitcoin continues to offer more than any CBDC ever will. After all, in addition to having a math-controlled scarcity, its network is also unobjectionable. In the meantime, the IMF model should come with censorship, such as the freezing of addresses and balances. While this already happens with stablecoins on open blockchains, to a lesser extent, this could be a preview of what this new system will look like. So there are different proposals. On the one hand, we have as much freedom as possible with Bitcoin, on the other, financial enslavement by the same people who devalue our currencies with inflation.