IMF warns El Salvador: “Bitcoin should not be used as a legal tender”
imf.org
imf.org
Basically, long story short, the IMF will immediately tell a country that they cannot bolster their local companies with tariffs or other legal means, meaning that local food industries (in the example of Jamaica) and numerous other sorts of local businesses immediately go bankrupt due to competition, and joblessness soars.
So the IMF will immediately take advantage of a country and kill basically any law that they have to try and bolster their local economy, in the need for the 'greater good'. Gorramn Tau.
If you want a more accurate view, read research papers on google scholar. Here's papers on IMF from 2017 [1].
The short take is the IMF provides lots of help to ailing countries, saves some and loses some. Pop culture doesn't tend to spread news of the winners since spreading lopsided arguments sells more books and blog posts.
Google scholar is a much more balanced and accurate place.
[1] https://scholar.google.com/scholar?as_ylo=2017&q=imf&hl=en&a...
Yep that's an important clarification indeed.
The IMF is a nation's last resort, like loan sharks would be a person's.
The documentaries referenced above seem to draw a picture of the IMF as a financial hit squad.
Haven't watched the Jamaica one yet, will schedule it for the weekend, but I'll be very surprised if it doesn't speak about a pattern of devastating IMF requirements similar to those documented in the others.
https://en.m.wikipedia.org/wiki/Import_substitution_industri...
Another method is to build infrastructure and make it impossible to pay back the interest. The IMF works in concert with the World Bank.
This model of manipulation is the way you rule the empire now. Why fight wars that arent profitable when you can manipulate economies on a macro level.
https://en.m.wikipedia.org/wiki/Confessions_of_an_Economic_H...
I should also mention Naomi Klein's No Logo. https://www.youtube.com/watch?v=oeTgLKNb5R0
It would be good to find a review (positive or negative) of that movie by economists, not movie critics. Until then, call me a skeptic.
> 13. Efforts to improve financial inclusion and raise growth are welcome, but risks arising from Bitcoin as a legal tender, the new payments ecosystem and trading in Bitcoin should be addressed. Crypto-technologies and digital payment systems like Chivo have the potential to make payments more efficient, thereby enhancing financial inclusion and supporting growth. Given Bitcoin’s high price volatility, its use as a legal tender entails significant risks to consumer protection, financial integrity, and financial stability. Its use also gives rise to fiscal contingent liabilities. Because of those risks, Bitcoin should not be used as a legal tender. Staff recommends narrowing the scope of the Bitcoin law and urges strengthening the regulation and supervision of the new payment ecosystem. Like for other e-wallets, Chivo should be required to fully safeguard customers' funds, both in U.S. dollars and Bitcoin, by segregating and ring-fencing reserve assets. Stronger regulation and oversight of the new payment ecosystem should be immediately implemented for consumer protection, anti-money laundering and counter financing of terrorism (AML/CFT), and risk management. Banking regulation should incorporate prudential safeguards such as conservative capital and liquidity requirements related to Bitcoin exposure. Measures to limit fiscal contingent liabilities, such as winding down the trust fund or withdrawing public subsidies to Chivo, should also be promptly considered. Recently announced plans to use the proceeds of new sovereign bond issuances to invest in Bitcoin, and the implications of trading more broadly in Bitcoin, will require a very careful analysis of implications for, and potential risks to, financial stability.
Only one small section of the page, Section 13, actually contains the sentence "Bitcoin should not be used as legal tender," but the sentence is conditioned on the country properly addressing the various risks to financial stability mentioned elsewhere in the page. It's unfair to quote only that one sentence, without providing any context.
Section 13 is in fact titled "Efforts to improve financial inclusion and raise growth are welcome, but risks arising from Bitcoin as a legal tender, the new payments ecosystem and trading in Bitcoin should be addressed."
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To the moderators: Please consider changing the editorialized title.
That is the original title from the article.
Yet I can't escape the feeling that the IMF is trying to protect its territory and monopoly.
(That's not to say that their help doesn't tend to have adverse side effects, just that the IMF isn't generally doing anything to your economy if you have stability around to destroy.)
"They're not so bad. They only exploit the desperate."
More seriously, that's not what GP meant at all. GP's point is that IMF usually steps in only after a country managed to paint itself into a financial corner - at this point there's no "nice" solution any more, and you're guaranteed to deal with mass unemployment, people losing their life savings, inflation, and so on.
Of course the debate is ongoing whether IMF's proposed solutions are actually in the best interest of the countries on the receiving end, but you know, if they don't like the deal these countries can always refuse it.
That the description of them destroying stability has a false premise. I mean, how much more explicit could be?
If you are looking for a secret ulterior motive, the difficulty is because there isn’t one.
If Bitcoin was actually some country's currency, that country would have imploded by now. Hyperdeflation is just as deadly to an economy as hyperinflation
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To the replies about other things affected by those factors: You're kind of making my point. We have countries that built their economies entirely on oil... the ones that diversified seem to be doing just a tad better.
BTC is not saving any economies. It might save some individuals which is not nothing, but please let's not pretend the IMF has some kind of conspiracy against BTC to maintain their control...
Definitely don't do Forex, or oil, or any commodities trading really.
WRT forex trading, has there been a "random whale" event in say, a top 15 economy, since Black Wednesday?
https://www.reuters.com/technology/majority-salvadorans-do-n...
> SAN SALVADOR, Sept 2 (Reuters) - Most Salvadorans disagree with the government's decision to adopt bitcoin as legal tender, with many unaware of how to use the digital currency and distrustful of the project, a poll by the Central American University (UCA) showed on Thursday.
> At least 67.9% of 1,281 people surveyed said they disagree or strongly disagree with the use of bitcoin as a legal tender, said the poll by UCA, a Jesuit university based in El Salvador. Just over 32% of people said they agree on some level.
Seems the majority of people disagree with this action.
> And a large chunk of those protestors are countryside people paid by US funded NGOs.
That's a broad claim, of which I don't find any evidence. Do you have references here?
What people see is that they get free money from the government and maybe they’re lucky to see it go up. They don’t know it could be half tomorrow.
Cryptocurrency as a primary method of transaction is 31 flavors of Baskin-Robin disaster. That doesn't make it any less funny when the IMF is complaining about a loss of control.
Yes, Lightning exists. I know. But it's essentially a system of private IOUs -- it's not something which would always be available to settle a debt between any two people.
Because the IMF is right now deeply involved in “stabilizing” Costa Rica’s economy, notionally for effects of the pandemic, at the government’s request.
Bitcoin undermines their existence.
https://news.ycombinator.com/item?id=29091010
If there's something in the comment you want to respond to, great: then add your comment.
The entire web is 1984 now. Crazy couple years
It has nothing to do with your particular statement about gasoline taxes or anything else. You could have made exactly the opposite statement and it would have had the same effect. The deeper issue is that HN is not a site for people who want to defeat their political enemies; it's a site for people who want to have curious conversation and learn from each other. I don't think that's too hard to understand.