Crypto assets will increasingly be monitored by the International Monetary Fund. According to a paper released by the IMF on Thursday, the fund plans to "manage" the transition toward a digital economy.
As a result of rapid technological innovation, the report highlights the benefits of digital assets, as well as a new era of public and private digital money.
Payments will become simpler, faster, and cheaper. They will also be more accessible and cross borders more quickly.
Users could benefit from these improvements as they foster efficiency and inclusion.
However, it is imperative that the IMF can keep up with policy challenges, which means the fund must look deeper into digital economies.
Besides collaborating with institutions in line with its mandate, the IMF will expand its own research into digital money and work closely with regulators and the World Bank.
A number of investments will be considered, including CBDCs, stablecoins and crypto-assets. Using these assets as representation of financial independence, they can also serve as a form of reserve currency, and they can replace traditional payment systems.
In several articles published earlier this week, the IMF warned about El Salvador's new Bitcoin law. Despite not specifically mentioning the country, the warning noted that "granting cryptoassets legal tender status” could threaten local economies, not to mention the time-consuming process of citizens selecting what currency they wish to hold.
The two IMF officials, Adrian and Weeks-Brown assert, said that if goods and services were priced in both real currency and crypto assets, households and businesses would be forced to spend considerable time and resources deciding which money to hold instead of engaging in productive activities.
Either by quoting taxes in advance in a crypto asset or by keeping spending largely in local currency will increase exchange rate risk for the government.
Conversely, the IMF went on record earlier this month saying CBDCs can help the global financial system rebuild.