Last week, an International Monetary Fund’s official made a suggestion to the central banks to make fiat currencies more attractive to for the digital age. He said that such a move would be a good way to out away potential competition from cryptocurrencies.
Now, the IMF has released a remarkable new article depicting cryptocurrency as the centerpiece of human evolution. The piece, written by Director of the IMF’s Strategy, Policy, and Review Department Martin Mühleisen, is called “The Future of Currency in a Digital World.”
In the report, released by IMF, it reads:
“These assets may one day serve as alternative means of payment and, possibly, units of account, which would reduce the demand for fiat currencies or central bank money.”
It has been still in the debate if cryptocurrencies will replace the central and commercial banks in future isn’t a new debate. As highlighted by the IMF, at the initial stages of the internet, there had been worries that the invention would make banks obsolete. But instead, the internet had made banking much more comfortable and accessible to the public. This could also be the case with cryptocurrencies.
“In the United Kingdom, Internet transactions already account for almost one-fifth of retail sales, excluding gasoline, up from just one-twentieth in 2008. And e-commerce sites are applying their data skills to finance. The Chinese e-commerce giant Alibaba already owns a bank and is using knowledge about its customers to provide small-scale loans to Chinese consumers. Amazon.com, the American e-commerce site, is moving in the same direction.”
However, one major disadvantage that had been laid out it the fact that it’s highly volatile, and before cryptocurrencies can win the battle this issue must be carefully addressed. To add, they believe in cryptocurrencies at the moment is way lower than that of fiat. Fraud cases, security breaches, and system failures are also things to consider.
IMF has hope in future technological innovations to solve most of these issues faced by virtual currencies at the moment
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