- 09 Jul, 2018
The world may soon have an internationally accepted cryptocurrency issued by International Monetary Fund (IMF). The institute is planning to develop its own digital currency IMF Coin, a crypotcurrency similar to the bitcoin. IMF wishes to exercise its special drawing rights (SDR) to replace existing reserve currencies with internationally accepted cryptocurrency.
IMF Chief, Christine Lagarde has recently encouraged banks and financial institutions to study blockchain technology. She also commented that the digital money could gain popularity as users prefer blockchain based payments systems. Some of the growing economies are increasingly using blockchain technology for cross border transactions circumventing banks and other financial institutions.
The recent trend among the countries to launch their own cryptocurrency is mounting across the globe. For instance, Dubai government is planning to launch its own cryptocurrency Em-cash. Additionally, a large number of banks are supporting blockchain based state-issued cryptocoins. IMF coin will be globally accepted cryptocurrency which provides decentralized security. However, IMF would fix and regulate its value to control the flow of money between different countries. Cryptocurrency enthusiasts believe that such a system would contradict to the decentralization principle of bitcoin. The decentralized protocol creates a free market where value is based on consensus of all network participants working independent of each other.
Christine Lagarde believes that IMF coin has potential to replace dollar owing to its growing adoption and global nature. Other currencies such as dollar and renminbi are regional in nature. IMF coin can be used by people from remote areas to protect their money against theft and other accidents. Bitcoin supporters however argue that there is no need of cryptocurrency from IMF when we already have bitcoin which is decentralized and internationally accepted. The financial market will undergo complete transformation favored by cryptocurrencies. A day is not far when users will prefer virtual currency over money due to its convenience, cost-effectiveness and highly secured nature.