IMF warns about Macro instability if Cryptos are recognized as legal

IMF has given a clear warning that if Crypto currencies are recognized as legal tender, there would be a macro economic instability.

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Some of the comments made by IMF are:

1. 1. Consumer protection risks remain substantial given limited or inadequate disclosure and oversight. For example, more than 16,000 tokens have been listed in various exchanges and around 9,000 exist today, while the rest have disappeared in some form.
   2. Many of them have no volumes or the developers have walked away from the project.
   3.  Some were likely created solely for speculation purposes or even outright fraud.
   4. The (pseudo) anonymity of crypto assets also creates data gaps for regulators and can open unwanted doors for money laundering, as well as terrorist financing.
   5. Although authorities may be able to trace illicit transactions, they may not be able to identify the parties to such transactions
   6. Threats to fiscal policy could also intensify, given the potential for crypto assets to facilitate tax evasion.
   7. A migration of crypto “mining” activity out of China to other emerging market and developing economies can have an important impact on domestic energy use—especially in countries that rely on more C0₂-intensive forms of energy, as well as those that subsidize energy costs—given the large amount of energy needed for mining activities.

It does not require rocket science to understand that if an anonymous form of currency comes into existence in the form of Bitcoin like Cryptos or the Crypto Assets such as Virtual Tokenized assets, the impact on the economy would be devastating and chaotic.

The Cryptos will definitely be attractive for all tax evaders, criminals, terrorists who are all in a majority in the world today. Honest tax payer is in a minority world over. Politicians who make rules are the primary corrupt persons who want continuation of the Digital Black currencies and Bureaucrats want find it comfortable for taking bribes.

In such a scenario, the hesitancy of the Indian Government to take on the banning of private cryptos is understandable though regrettable. What is a tragedy however is that even Mr Narendra Modi is not able to take a decision probably because the majority of people around him are in favour of Cryptos.

The recent hacking of Mr Modi’s twitter account to promote Bitcoins is not surprising since a majority of persons associated with Bitcoins are criminals and expert hackers. They will continue to undertake their Cyber Terror attacks such as these to show off their strengths.

If we are not buckling under the terror attacks in Kashmir, we should not buckle under the Bitcoin sponsored attacks also.

According to today’s press reports, the presentation of the Bill in the Parliament  is likely to be delayed. I hope this is only a wishful thinking of the industry. But we need to keep our fingers crossed and wait to see whether the Government has the courage to take on digital black money or not.

Naavi