The IMF published a 58-page report detailing why cryptocurrencies are not worth pursuing. In particular, if the Marshall Islands decides to still issue SOV, American banks will cease to work with this jurisdiction.
Given that the Marshall Islands uses the U.S. dollar for settlements, and U.S. banks are the backbone of the local financial industry, the threat is more than serious. Moreover, the Marshall Islands themselves do not provide themselves either financially or in terms of resources. The country is fully imported fuel, many products, and goods.
The IMF, which is a Pro-American organization, notes that “the benefits of digital currency are significantly lower than the potential costs.” And if measures are not taken to mitigate financial, reputational and economic risks, it is better to refrain from introducing a digital currency as a legal tender in a particular country.
Experts of the Fund argue that it is impossible to use digital currencies to combat money laundering and terrorist financing. At the same time identification on the person and a limited range of application in the return, for some reason do not convince.
Why did the IMF speak so sharply against the Marshall Islands, and not say Venezuela, which issued Petro or Turkey and Iran, which also plan their own cryptocurrencies?
Perhaps the fact that the Marshall Islands are in Association with the United States and use the dollar as the national currency. It turns out, in the case of the adoption of SOV, cryptocurrencies are almost officially recognized at the US level. In addition, the Marshall Islands can at least be pressed, unlike Iran, which has almost no leverage left after the US withdrawal from the nuclear deal.
Another reason is even more prosaic: representatives of the IMF, Central banks and other organizations understand that cryptocurrencies can compete with their currencies and gradually reduce their influence on international markets. The IMF and others fear a loss of power and control, justifying it with chaos and terrorist financing.
According to research, terrorists still prefer to use cash. Increasingly, the perpetrators of terrorist acts are individuals and small groups. They do not even need to get out of their own garage to create a dangerous plan to harm the economy and the state.
Therefore, the pressure on the Marshall Islands by the IMF is more an attempt to defend their own warm spot, rather than concern about laundering. Especially if transactions are verified through the identification of persons.
You can be sure that other States planning to issue national cryptocurrencies are closely monitoring the situation. Much depends on how the Marshall Islands government behaves. If they quietly accept the pressure and abandon their own plans, other countries will delay issuing their coins. If the Marshall Islands even feigned indignation and resistance, it would serve as an inspiration to other, larger, independent countries.
Despite all attempts to stop progress, cryptocurrencies, or more precisely blockchain technology, will make its way. It is already becoming a part of our society and affects economic indicators, social projects and even the energy sector. With the help of blockchain, they are ready to vote, protect copyrights, sell land and much more.
Cryptocurrencies try to compete with conventional currencies and therefore experience resistance. However, the likelihood that digital assets will evolve and replace existing payment methods is extremely high. In fact, an ordinary Bank transfer today is already a digital operation. Data on the money in the account, the transfer at any time can be removed with a flick of the hand.
Blockchain will at least show when and where it happened. At the proper level of development-will prevent.
The cryptocurrency market is an interesting and unpredictable place. If you dare to plunge into it, you can earn good money. Provided you understand what works and how.