SDNY COURTHOUSE,
Nov 22 – When the
International Monetary Fund
held its biweekly embargoed
press briefing on September
16, Inner City Press asked
about crypto-currency
legislation in Ukraine and
again El Salvador, about the
coup in Guinea and the role of
the Venezuela talks in Mexico
on release of the SDRs. IMF
video and transcript
forthcoming.
Spokesperson Gerry Rice
responded on each. Podcast here.
Short video of Qs on Twitter here.
Now longer YouTube of IMF
video here.
Full transcript here.
Inner City Press
asked, "
what is the IMF's view of
Ukraine's move to regulate
crypto-currency? Also, the new
legislation proposed in
Panama, and the implementation
of the El Salvador Bitcoin as
legal tender bill?" When
called on, Inner City Press
added that Ukraine would use
nuclear reactors' output for
mining.
Rice cited
an upcoming virtual mission to
Ukraine later this month, and
said that on El Salvador, the
talks are under Article 4, not
for a program, as least at
this point.
On November 22,
the IMF issued its Article IV
report on El Salvador,
including that "[e]fforts 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."
Back on January 8
Inner City Press asked the
IMF's Helge Berger, Mission
Chief, about China's so-called
Belt and Road Initiative:
"Your Article IV report cites
China's "overseas lending
projects" amid "rising
geopolitical tensions and
economic and trade frictions."
How does the IMF think that
rising debt levels among
African countries, and
increased skepticism about the
"Belt and Road" will impact or
be addressed going forward?
-Matthew Russell Lee, Inner
City Press. Video here.
and see, now, the book "Belt
and Roadkill," here.
(An aside: Inner
City Press has
reported on
the CEFC China
Energy Fund
Committee's
activities in
Chad and
Uganda and in
the UN, on
which the UN is
UNresponsive.)
Other questions
included
China's digital
currency (Inner
City Press also reports
on
crypto-currency
cases in the
U.S. District
Court for the
Southern
District of
New York and
elsewhere).
Berger said
when used
overseas an
issue is that
residents
could start
using another
country's
currency, if
it is easier.
We'll have more
on this.
***
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