25 August 2020 14:00, UTC

Anna Martynova

The IMF has been following developments in this area with interest for some time. Nearly two years ago, Christine LAGARDE directly asked central banks to consider issuing digital coins. An article titled “Back to Basics. What are cryptocurrencies? ” defines them as a potentially new form of money that offers both benefits and risks.

The explanation given by the International Monetary Fund for cryptocurrencies is short, informative enough, non-technical and interesting. In particular, it explains how states have introduced legal tender in the past. Moreover, states that issued their own fiat currencies were tempted to print more and more currency, thereby fueling inflation.

As explained in an IMF article, cryptocurrencies rely on distributed ledger technology – blockchain that generates a ledger supported by a computer network. The article also explains the existence of two wallet keys, public and private, and how they work. The IMF article concludes with a list of risks and benefits that show a good knowledge of new technologies and a committed but impartial approach.

Image by DNA India

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