I hate to say I told you so, but then I couldn’t get my head around how illegitimate digital currency could force its way into the financial market without causing an outcry. For one, banks couldn’t and wouldn’t accept it as currency and then pay hard cash to compensate it unless there was actual accepted legal currency in circulation.
As it stands banks don’t like it as it makes fools out of the system which is accepted around the world apart from El Salvador, whose president created Bitcoin as legal currency and got his pants torched when cryptocurrency plummeted earlier this year. Since January major players like Terra with Stablecoin and now FTX have crashed sending market shares tumbling down. Talk about Humpy Dumpty fell off the wall and all the king’s men couldn’t put Humpty together again!
Now the IMF which stands for International Monetary Fund has supported my argument and recently published a sixty-eight-page document explaining in pretty clear writing why blockchain technology is the way forward. However, there is a clear definition and it reads as follows:
“When people or companies make a payment, they are trusting in two things: the money itself and the payment system that executes the transaction. While often taken for granted, these two elements are a crucial foundation of any economy. Every day, billions of times, households and businesses put their trust in this system and the institutions underpinning it.
Digital innovation is upending both money and payments. Cryptocurrencies and decentralized finance (DeFi) are built on the premise of decentralization, aiming to replace traditional financial intermediaries (bankers, brokers, custodians) with technological solutions. The remarkable rise of cryptocurrencies has captured the popular imagination and offers a glimpse of new technical capabilities. These include the ability to program payments (programmability) combine different operations into one transaction (composability), and generate a digital representation of money and assets (tokenization).
Yet recent developments have underscored crypto’s failure to fulfill the requirement of a monetary system that fully serves society. Its shortcomings are not just bugs but structural flaws. This is why we argue that the monetary system of the future should harness the new technical capabilities demonstrated by crypto but be grounded in the trust the central bank provides (BIS 2022).”
In other words, the IMF is supporting banks around the world and substantiating why cryptocurrencies will not overshadow legitimate monetary distribution.
Prof. Carl Boniface
Outcry (n) = uproar, hullabaloo, turmoil, row, protest
Remarkable (adj) = extraordinary, amazing, notable, outstanding