The International Monetary Fund, a global financial organization with a lot of clout, has come up with a pretty detailed outlook on cryptocurrency and digital assets.
Marie Huillet at Cointelegraph covers a report published Monday where the IMF lays out a “conceptual framework” for understanding the potential of coins to disrupt financial markets.
At the core of this model are five specific factors that could create ‘wildfires’ of digital money adoption in the financial system: convenience, ubiquity, complementarity (sic), low transaction costs, and trust. Many of these, arguably, are already in place with Bitcoin.
A sixth element, according to the IMF, could be the lighter fluid that sets the conflagration ablaze – network effects work on a principle of what some might call herd behavior – new technologies that achieve a critical mass of adoption therefore have a sort of physical and mental infrastructure to catch on further, triggering global sea change.
The IMF provides examples like text messaging innovation, showing how this idea works and has also created a very technical taxonomy of how centralized and decentralized coins can stand in for traditional currencies.
Then there’s strategy.
“Devoting a section of its analysis to the question of central bank digital currencies (CBDCs), the IMF proposes a hybrid approach that would be established by a public-private partnership — defining the proposed asset as a synthetic CBDC (sCBDC),” Huillet writes.
Both the IMF and the World Bank have in the past been critical of cryptocurrencies, even while the IMF has considered its own form of digital asset creation.
Now it seems like the strategy undertaken by the global regulator is to keep crypto transparent and visible, where bankers feel they can more easily deal with it. Monitoring, according to the IMF, may help finance leaders to keep any parabolic disruptions in check.