On May 30th, the IMF published in its quarterly magazine “Finance & Development”, the article entitled “Monetary Policy in the Digital Era”, which raises the possibility that “cryptographic assets may someday reduce the demand for money from the central banks”. In face of the competition scenario that cryptocurrencies represent to the monopoly of banks in monetary matters, the IMF recommends that central banks issue their own digital tokens. Furthermore, government authorities should regulate the use of cryptographic assets.
Although cryptographic assets remain volatile, technological innovation continues and the improvement in their “smart” issuance rules could overcome these deficiencies, encouraging a greater adoption. Thus, these assets could one day serve as an alternative means of payment and as units of account, reducing the demand for central bank fiduciary currencies. In this way, the IMF argues that instead of ignoring digital advances or asking governments to legislate against them, central banks should “learn from the properties of cryptographic assets” and improve their economic forecasts by using of big data and artificial intelligence.
In turn, the IMF recommends that government authorities regulate the use of cryptoactives, “applying measures to prevent money laundering, strengthen consumer protection and effectively tax encrypted transactions.” On the other hand, it recommends that central banks issue their own digital tokens to supplement physical cash and bank reserves.