He International Monetary Fund (IMF) has published a video and an article that explains what are cryptocurrencies.
What are cryptocurrencies? https://t.co/ggONlLkA2r pic.twitter.com/yYpj3Jf37E
– IMF (@IMFNews) August 23, 2020
The IMF has followed developments in this area with interest for some time, so much so that almost two years ago the then director Christine Lagarde It explicitly asked central banks to consider the possibility of issuing digital currencies.
Cryptocurrencies explained by the IMF
The explanation that the International Monetary Fund gives for cryptocurrencies is very concise, quite informative and non-technical, and definitely very interesting.
For example, the video concludes by saying:
"This could be the next step in the evolution of money."
The article, titled “Back to basics. What are cryptocurrencies? ", defines them as a possible new form of money that offers both advantages and risks.
The article itself, in fact, begins with a brief description of the history of moneyprecisely to track the fundamentals that cryptocurrencies seem to question.
In particular, it explains how in the past, states introduced legal tender, which has no intrinsic value, and that these fiat currencies did not always have a stable value or were widely accepted, mainly because creditors did not trust the issuer.
Furthermore, states that issued their own fiat currency were tempted to print more and more currency, thus fueling inflation.
The solution to this last problem was to entrust the issuance of fiat currency to central banks with the precise task of maintaining price stability by regulating the money supply instead of and on behalf of governments.
The cryptocurrency revolution
The cryptocurrency revolution could really be a step forward in this millennial evolutionsince they don't need a central agent to trust.
As the IMF article explains, cryptocurrencies are based on a distributed ledger technology, the blockchain, which generates a ledger that is maintained by a computer network, the accuracy of which can be verified by each member of the network.
The article also explains the existence of the two keys of the wallets, public and private, and how they work.
Finally, the IMF article concludes with a list of risks and benefits, highlighting a solid knowledge of these new technologies and a caring but decidedly unbiased approach.
The IMF and the BIS in comparison
This approach is almost diametrically opposed to that of the Bank for International Settlements (BIS), which long ago expressed very tough positions towards cryptocurrencies, denoting a lack of knowledge of their operation and a decidedly sectarian and superficial approach.
Instead, the IMF has shown a clear interest and a good deal of impartiality, which probably reveals a sincere intention to understand how this technological innovation that undoubtedly has enormous potential.