Does the IMF have a vendetta against cryptocurrencies?

Is the International Monetary Fund (IMF) really hostile to crypto? Many in the cryptocurrency/blockchain space think so. In January, the fund asked El Salvador to drop Bitcoin (BTC) as legal tender. 

In May, it reportedly pressured Argentina to curtail crypto trading as the price for an IMF loan extension, and it also recently warned the Republic of the Marshall Islands (RMI) that raising a digital currency to the status of legal tender could “raise risks to macroeconomic and financial stability as well as financial integrity.”

“I do believe that the IMF is an implacable foe of crypto,” David Tawil, president and co-founder at ProChain Capital, told Cointelegraph. Given that Bitcoin and other cryptocurrencies are ‘“issued” by non-state entities and are borderless, “crypto has the potential to be ubiquitous, which can significantly curtail the need for the IMF,” a financial agency of the United Nations.

“Bitcoin stands against everything the IMF stands for,” Alex Gladstein, chief strategy officer of the Human Rights Foundation, told Politico in June. “It’s an outside money that’s beyond the control of these alphabet soup organizations,” while Kraken’s Dan Held simply tweeted, “The IMF is evil,” in response to the fund’s reported actions in Argentina.

Still, others believe that this multilateral lending institution that serves some 190 countries — and has long been a lightning rod for criticism in the developing world — may have a more nuanced view of cryptocurrencies.

A broad-minded view of crypto-assets?

In a September report, “Regulating Crypto,” the IMF seemed to have no problem with the existence or even proliferation of non-governmental digital currencies. Indeed, it called for a “global regulatory framework” for cryptocurrencies in order to bring order to the markets “and provide a safe space for useful innovation to continue.” 

“The IMF has taken a very broad-minded view of crypto-assets,” John Kiff, managing director of the CBDC Think Tank and, until 2021, a senior financial sector expert at the IMF, told Cointelegraph, especially if one looks beyond some of the recent cases cited above. He added:

“The Marshall Islands and El Salvador opinions pertained to country governments adopting crypto as legal tender when their unit of account currencies were already well established. And, those adverse opinions were mostly focused on the macroeconomic impact of hitching their fiscal wagons to…