The International Monetary Fund (IMF) has said that cryptocurrenices are nothing more than an “inadvisable shortcut” to financial inclusion. 

“As national currency, cryptoassets—including Bitcoin—come with substantial risks to macro-financial stability, financial integrity, consumer protection, and the environment,” the IMF wrote in a blog post. 

A breakdown of the IMF’s concerns


When it comes to cryptocurrencies as national currencies, the IMF has four key concerns. 

The first and foremost is macroeconomic stability. Government revenue would suddenly become exposed to exchange rate risks, for example, if taxes were quoted in crypto, while expenditures remained quoted in local currency or vice versa, the IMF said. 

Monetary policy would also “lose bite,” and domestic prices could become “highly unstable.” “Even if all prices were quoted in say, Bitcoin, the prices of imported goods and services would still fluctuate massively, following the whims of market valuations,” the organization said. 

“The official monetary unit must be sufficiently stable in value to facilitate its use for medium to long term monetary obligations,” the IMF added. 

Another key concern for the IMF is financial integrity, or, more bluntly, the widespread risk of financial crime. The organization cited the use of crypto to finance terrorism, dodge taxes, and launder illicit funds. 

Guidance on these risks is published by the Financial Action Task Force (FATF), a global financial crime watchdog. However, as the IMF itself points out, the application and enforcement of these standards are far from consistent around the world. 


Additionally, the IMF cited the cryptocurrency industry’s damaging impact on the environment as a key hurdle.  

“Mined cryptoassets such as Bitcoin require an enormous amount of electricity to power the computer networks that verify transactions. The ecological implications of adopting these cryptoassets as a national currency could be dire,” the IMF said. 

If not for these primary concerns, the IMF urges countries looking to adopt cryptocurrencies to consider Internet accessibility and cyberattacks, such as ransomware.

“Internet access and technology needed to transfer cryptoassets remains scarce in many countries, raising issues about fairness and financial inclusion,” the IMF said. 

IMF draws attention to El Salvador

These are all problems facing El Salvador, which is the only country in the world to have made serious inroads when it comes to adopting a cryptocurrency—Bitcoin—as legal tender. 

What’s more, the IMF previously told El Salvador in no unclear terms that it was not interested in helping the Latin American country pursue its Bitcoin project. 

The IMF added that in countries with stable inflation and exchange rates, as well as credible institutions, the demand for cryptocurrencies to double up as legal tender is “unlikely to catch on.” 

But even in El Salvador, where inflation has been a political talking point for years, the country’s Bitcoin project has generated a lot of criticism. 


Per a study from the Francisco Gavidia University in El Salvador, more than 75% of Salvadorans think President Bukele’s adoption of Bitcoin as legal tender is “not very wise.” 

What’s more, 43%—almost half of the study’s respondents—believe Bitcoin adoption will be detrimental to the country. Only one in four people think it will be beneficial. 

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