The growth in the use of cryptocurrencies and similar digital assets has never really received any support from the International Monetary Fund (IMF) and the financial body’s stance has remained unchanged over the years. In a latest development, the IMF has warned Zimbabwe against introducing a gold-backed digital asset to stabilize its economy against fluctuations in the US dollar. The IMF fears that this digital asset could become a hindrance to the current economic system in the country.
IMF Allegedly He believes that instead of launching this new digital asset, Zimbabwe should consider ‘liberalizing its forex market’.
“A careful assessment should be made to ensure the benefits from this measure outweigh the costs and potential risks, including, for example, macroeconomic and financial stability risks, legal and operational risks, governance risks, costs of abandoned FX reserves,” a An unnamed source familiar with the matter was quoted by Bitcoin.com as saying.
As per its plans, the southern African nation is looking allow Exchange small denominations of Zimbabwe Dollars for digital gold tokens to protect your investment against market volatility.
The move aims to fight the inflationary situation in Zimbabwe with the help of this planned stablecoin.
IMF officials have contacted Zimbabwe’s regulators, suggesting it avoid mixing crypto-like digital assets in its financial system.
As an alternative suggestion, the international lender has called on Zimbabwe to adopt tighter monetary policies to safeguard its citizens against market volatility.
So far, Zimbabwe has not responded to the IMF’s suggestions or concerns.
However, this is not the first time that the IMF has voiced its issues with the development of digital assets.
before it was criticized Central American nation El Salvador to integrate bitcoin with its traditional banking system dependent on the US dollar. In September 2021, guard Became the first country in the world to legalize bitcoin as a legal currency, along with the US dollar, as a payment option.
Later in 2022, the IMF projects debt-ridden Argentina Signal A deal that ‘discourages’ crypto use in exchange for financial support.