IMF Managing Director: Not optimistic about Bitcoin rivaling the U.S. dollar!

Ritu13

Last week marked a significant milestone for the cryptocurrency industry, as the U.S. Securities and Exchange Commission (SEC) approved a total of 11 Bitcoin spot exchange-traded funds (ETFs), potentially driving broader adoption of Bitcoin.

However, International Monetary Fund (IMF) Managing Director Kristalina Georgieva emphasized in an interview with Yahoo Finance on the 15th that the U.S. dollar remains the U.S. dollar, and cryptocurrencies are merely investment tools. She stated, "Our viewpoint is that we must distinguish between currency and assets. When talking about cryptocurrencies, we are essentially discussing a category of assets."

Georgieva acknowledged that there might be value behind cryptocurrencies. In this sense, cryptocurrencies may have the potential to be safer with lower risks, but at the same time, the investment risks are currently higher. Cryptocurrencies are not considered currencies; they are more like a form of asset management fund.

Not optimistic about Bitcoin rivaling the U.S. dollar, Georgieva expressed that the day when cryptocurrencies could truly compete with the U.S. dollar is distant. She stated that discussing this matter at present is not meaningful. Georgieva explained that the U.S. dollar dominates the global economy due to the scale of the U.S. economy, particularly the depth of the U.S. capital markets. While she encourages diversification in investments, she is not overly concerned about Bitcoin challenging the U.S. dollar, as there are other issues that may be more pressing.

Regarding cryptocurrency regulation, Georgieva previously called for regulatory measures due to the financial stability risks posed by cryptocurrencies. She noted that cryptocurrency adoption, especially in high volumes, could affect the effectiveness of monetary policy transmission, capital flow management measures, and fiscal sustainability, mainly due to tax-related fluctuations.

Georgieva emphasized that the IMF aims to mitigate cryptocurrency risks by providing rules and leveraging cryptocurrency-related technologies to build infrastructure for a more efficient, interoperable, and connected financial system. She clarified that establishing rules does not mean reverting to the pre-cryptocurrency world or suppressing innovation.

In September of the previous year, the IMF and the Financial Stability Board (FSB) jointly released a policy roadmap, suggesting that outright banning cryptocurrencies cannot eliminate their risks. Instead, comprehensive regulation and supervision of cryptocurrencies should be the benchmark for preventing cryptocurrencies from posing risks to macroeconomic and financial stability.

Yamini003

Let's take a look at the price of Bitcoin.

Sona59

The two are not originally the same concept.

Kahn332

It might be challenging for Bitcoin to rival the U.S. dollar.

Jafar224

This definitely won't be mentioned in the same breath as the U.S. dollar.