Before the COVID-19 pandemic in Asia there was a strong division between the crypto and financial markets in general. Now, that border has got thinner and the situation demands additional regulatory measures, the International Monetary Fund (IMF) believes. In a blog post from Aug. 21, a group of IMF economists shared their concerns over the dynamics of Asian markets, where the integration of crypto in the larger financial system appears to be growing swiftly. This poses certain risks to financial stability, the economists stated, adding: “While the financial sector appears to have been insulated from these sharp movements, it may …

An International Monetary Fund study on energy consumption has reveale the importance of design choices within the crypto ecosystem to build an environmentally friendly mainstream payment system. In the study, titled “Digital Currencies and Energy Consumption,” the IMF examines the energy consumption of crypto assets based on their distinct design elements to evaluate the ideal mechanism for developing central bank digital currencies (CBDCs). Sharing the groundwork for policy discussions around the environmental impacts of digital currencies, the IMF recommends moving away from proof-of-work-based distributed ledger technology applications, adding: “In particular, Bitcoin, the best known application of this type, is estimated …

In discussion with the International Monetary Fund (IMF), T Rabi Sankar, the deputy governor of the Reserve Bank of India (RBI), reflected an anti-crypto stance as he spoke about India’s potential to disrupt the crypto and blockchain ecosystem. Rabi Sankar started the conversation by highlighting the success of the Unified Payments Interface (UPI), India’s in-house fiat-based peer-to-peer payments system, which has seen an average adoption and transaction growth of 160% per anum over the last five years. “One of the reasons it is so successful is because it’s simple,” he added while comparing UPI’s growth with blockchain technology. According to …

The governor of the Bank of Central African States, or Banque des États de l'Afrique Centrale (BEAC), has issued a scathing letter to the Central African Republic (CAR) regarding the country’s adoption of cryptocurrencies. In a letter addressed to the CAR Finance Minister Hervé Ndoba, governor of the BEAC Abbas Mahamat Tolli describes the “substantial negative impact” that the CAR adopting crypto will have on the monetary union of Central Africa. The CAR passed a bill announcing its intention to adopt cryptocurrencies in April. It is no surprise that the International Monetary Fund (IMF) has already called the decision concerning. …

The University of Cambridge is collaborating with some of the world’s top banking institutions and private companies to introduce a new project targeting cryptocurrency research. The Cambridge Center for Alternative Finance, or CCAF, has launched a research initiative aiming to bring more insights on the rapidly growing digital asset industry, the CCAF announced to Cointelegraph on Monday. Dubbed the Cambridge Digital Assets Programme, or CDAP, the project is a public-private collaboration with 16 companies including public institutions like the Bank for International Settlements Innovation Hub and the International Monetary Fund. The initiative also includes banks like Goldman Sachs, financial giants …

The Republic of the Marshall Islands has moved to formally recognize decentralized autonomous organizations, better known as DAOs, as legal entities — a move that gives collectively owned and managed blockchain projects formal recognition on the global stage. DAOs, which are blockchain-based entities governed by a self-organizing community, have attained legal recognition in the Marshall Islands after the country passed the amended Non-Profit Entities Act 2021. The amendment allowed cryptocurrency trading infrastructure platform Shipyard Software to incorporate the island country’s first DAO — Admiralty LLC. The incorporation was aided by MIDAO Directory Services Inc., a domestic organization that was established …

El Salvador faces another whipping from a traditional finance firm for its "forbidden" love for Bitcoin (BTC). American credit rating agency Fitch Ratings lowered El Salvador’s long-term Issuer Default Rating (IDR) from B- to CCC, mentioning “policy unpredictability” and the “adoption of Bitcoin as legal tender” as some of the factors that led to the downgrade. Apart from these, the statistical rating organization explained that reliance on short-term debt, an $800 million Eurobond payment due in January 2023, and a high fiscal deficit gets in the way of a better rating for the country. Additionally, El Salvador’s increased short-term debt …

Salvadoran President Nayib Bukele has made yet another bullish Bitcoin prediction soon after the International Monetary Fund urged his government to remove Bitcoin’s status as legal tender. Bukele took to Twitter on Monday to predict that Bitcoin (BTC) will ultimately see a “gigantic price increase” due to its limited supply of only 21 million digital coins. The president cited Bitcoin's scarcity case, emphasizing there are “more than 50 million millionaires” in the world, and there is not enough Bitcoin if each one of them wanted to own at least one BTC. “No enough for even half of them. A gigantic …

Members of the executive board at the International Monetary Fund are urging lawmakers in El Salvador to no longer recognize Bitcoin as legal tender. The IMF reported on Tuesday that though digital payments had the potential to increase financial inclusion in the Central America nation, the use of Bitcoin (BTC) as legal tender carried “large risks” related to financial stability, financial integrity, and consumer protection. The executive board directors urged El Salvador authorities to “narrow the scope of the Bitcoin law by removing Bitcoin’s legal tender status,” also expressing concern about the potential risks of issuing Bitcoin-backed bonds. The officials’ …

Last week saw an unlikely first move in the opening narrative battle around a prospective U.S. central bank digital currency: Congressperson Tom Emmer came forward with an initiative to legally restrict the Federal Reserve’s capacity to issue a retail CBDC and take on the role of a retail bank. This could be massively consequential as we are yet to see a similarly sharp-cut expression of an opposing stance. As a matter of fact, it is not even clear whether other U.S. lawmakers have strong opinions on the matter other than, perhaps, condemning privately issued stablecoins as a digital alternative to …

El Salvador’s historic embrace of Bitcoin (BTC) could have negative consequences on the country’s sovereign credit outlook, according to Moody’s Investors Service. Moody’s analyst Jaime Reusche told Bloomberg this week that El Salvador’s Bitcoin gambit “certainly adds to the risk portfolio” of a country that has struggled with liquidity issues in the past. Under the leadership of President Nayib Bukele, El Salvador has recognized Bitcoin as legal tender and issued a state-run crypto wallet to facilitate payments, transfers and ownership. Along the way, El Salvador has amassed a treasure chest of 1,391 BTC, with President Bukele famously “buying the dip” …

Crypto is no longer an obscure asset class within the financial ecosystem, but a growing correlation with the stock market undercuts the “investment hedge” role of Bitcoin (BTC) and other cryptocurrencies, according to new International Money Fund (IMF) research. A blog post accompanying the survey highlights new risks associated with the growing interconnectedness between virtual assets and financial markets. Penned by IMF Monetary and Capital Markets Department director Tobias Adrian as well as economist Tara Iyer and Research deputy division chief Mahvash S. Qureshi, the article claims that the increasing correlation between crypto assets and stocks “limits their perceived risk …