The official IMF quarterly magazine published an article praising Bitcoin and said that cryptocurrencies?and blockchain technology could radically rewire the finance sector.
The article was published by Andres Adriano and Hunter Monroe, senior figures within the IMF. The article talks about one of Bitcoins prime advantages over traditional currency: that it makes things far easier to transfer money from one group to another without having to go through some central financial institution.
Bitcoin offers greater anonymity compared to traditional currencies, but bitcoin skeptics often complain that Bitcoins anonymity just makes it a tool for criminals. The FBI in 2012 expressed concerns about how “Bitcoin might logically attract money launderers, human traffickers, terrorists, and other criminals who avoid traditional financial systems by using the Internet to conduct global monetary transfers.”
But Adriano and Monroe state that there are plenty of legitimate reasons for this. They observed that just as Uber has managed to shake up the taxi industry, Bitcoins and blockchain technology could do the same to a stagnant financial industry. Other industry analysts agree.
“There is much more to these crypto-currencies than just anonymous transactions,” explains Dr. Ruja Ignatova, who runs OneCoin, a Bitcon alternative. “My cryptocurrency, OneCoin, for example,??has implemented KYC (know-your-customer) rules, thus disrupting any possible misconduct by its users.?Whats most important is the underlying technology ? the??blockchain ? which is a digital technology that?records?and verifies?transactions. The blockchain is the future.”
While central financial institutions can take days to transfer money from one account to another while demanding fees, Bitcoin users can transfer money from one account to another instantly for free.
While some Bitcoin users envision Bitcoin supplanting the dollar and becoming the currency of the future, the IMF writers see Bitcoin and blockchain as a means to help banks. And while Bitcoin has a reputation for secrecy, other currencies could use blockchain technology to improve transparency. IBM vice president for blockchain technologies Jeff Cuomo observed in the article that “its perfectly possible to have a blockchain with different levels of access, in which participants dont see what others are doing, but auditors and regulators come in at a higher level and see everything,”
The IMF is not the only institution which sees the potential of cryptocurrency. About two weeks ago, Federal Reserve Chairman Janet Yellen held an event to discuss the potential of blockchain and how it could be used to help the financial sector. Yellen encouraged central banks to learn about cryptocurrencies and blockchain, and figure out how it could be used to benefit said banks.