The International Monetary Fund released a report on the governance and adoption of digital currencies in Latin America and the Caribbean after recommending a single ledger CBDC payment system.
The International Monetary Fund (IMF) reiterated its support for cryptocurrency regulation in some nations, but it added that a complete prohibition might not be the wisest course of action.
The IMF noted several measures taken by local governments to address the proliferation of cryptocurrencies and central bank digital currencies, or CBDCs, in a report on Latin America and the Caribbean published on June 22. The Bahamas was the first country to introduce its own CBDC, the Sand Dollar, in October 2020, while El Salvador has accepted Bitcoin as a legal tender since September 2021.
According to the IMF, Brazil, Argentina, Colombia, and Ecuador were among the top nations in the world for the adoption of digital assets in an effort to assist the unbanked, send more quickly and inexpensive payments, and more. These governments’ regulation of cryptocurrencies was claimed to be “in progress” in these countries. The fund also claims that the majority of central banks in the area “have adopted or are considering adopting digital currencies.
According to the IMF, “If well designed, CBDCs can enhance the usability, resilience, and efficiency of payment systems and increase financial inclusion in [Latin America and the Caribbean].” “While certain countries have outright prohibited crypto assets due to their hazards, this approach might not be successful in the long run.
Instead, the region ought to concentrate on addressing the factors that are driving demand for cryptocurrencies, such as the unmet requirements of its people in terms of digital payments, as well as on increasing transparency by integrating data on crypto asset transactions in national statistics.
IMF officials have often spoken out against countries using cryptocurrency as legal tender. Tobias Adrian, the organization’s director of the monetary and capital markets division, put out a payment system on June 19 that would use one ledger to record CBDC transactions; however, the concept was strongly opposed by many in the cryptocurrency community.