The IMF Confuses Cause and Effect by Pointing to the Greater Use of Bitcoin in Corrupt Countries.
The IMF Confuses Cause and Effect by Pointing to the Greater Use of Bitcoin in Corrupt Countries.
Bitcoin is a weapon against inflation and money oppression.
The IMF just released a report entitled “Crypto, Corruption, and Capital Controls: Cross-Country Correlations” which I strongly urge you to go read. It is always interesting to read what the IMF writes about Bitcoin and cryptocurrencies.
The IMF surveyed over 110,000 people in more than 55 countries, interviewing between 2,000 and 12,000 people in each country, about their use of cryptocurrencies. The authors of the report found many reasons why cryptocurrencies may be more popular in one country than another. Among these reasons are the ones we all know: high inflation means that Bitcoin is more stable than a local currency.
So it is a necessity, rather than an alternative yet.
High inflation countries led by corrupt leaders use Bitcoin and cryptocurrencies far more than others according to an IMF study
Since poorer nations also tend to have higher capital controls: measures that prevent the flow of foreign funds in and out of the country's economy, Bitcoin and cryptocurrencies also often represent a way to circumvent taxes and limits. This is among the 8 ways Bitcoin is already helping the poor daily.
The IMF study authors go on to write:
“A history of high inflation may make the domestic currency less attractive as a store of value. Past inflation is used as a proxy for the stability of the currency, which may affect the attractiveness of crypto assets as an alternative store of value.”
In this report, the IMF advocates for stricter international regulation of Bitcoin and cryptocurrencies. It won't surprise you to learn that the IMF wants KYC policies to be strengthened. The issue has recently come back to the forefront with a lot of lies being spread about Russia's alleged use to escape Western sanctions due to Putin's war on Ukraine.
But as I have already shown you, Bitcoin is not in a position to allow Russia to do that at the moment. And this is for various reasons, the first of which is too little liquidity given the current needs of the Russian economy.
Thus, the warnings of the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department are to be taken with a pinch (a lot rather!) of salt, as well as the repeated attacks on this subject by American politicians such as Hilary Clinton and Elizabeth Warren.
For those who are interested in solutions to buy Bitcoin in no-KYC mode, I refer you to this article on the subject:
Politicians from the world's major economic powers who are critical of Bitcoin did not like the fact that the exchange platforms refused to implement a ban on their Russian customers. Yet such an action would have been counterproductive, and above all, shameful. The Russian people are also suffering the consequences of Vladimir Putin's war. Thus, Bitcoin and cryptocurrencies are solutions to protect themselves from the indigence of a leader like Vladimir Putin.
Bitcoin is there to help each of its users. Whether Western leaders like it or not.
The authors of the IMF report go on to point out that according to their research, Bitcoin and cryptocurrencies are most used in highly corrupt countries. They take the example of Venezuela, but also of African countries. The usual anti-Bitcoin and cryptocurrencies clichés are then used. The IMF talks about the financing of illegal activities or even tax evasion. For them, the advantage of crypto assets is that they allow moving large amounts of money quickly and with great ease. All of this while freeing themselves from national borders.
At the end of the report, the authors say that Bitcoin and cryptocurrencies should not be definitively condemned, but that the lack of strict regulation is a huge problem in their eyes.
IMF deliberately confuses cause and effect. Bitcoin helps fight corruption and money oppression
After reading this IMF report, my feeling is clear: the IMF is too quick to make an association by confusing cause and effect. Let me explain. If Bitcoin and cryptocurrencies are used more in corrupt countries, it is primarily because it is in these countries that we find the most oppressive and corrupt leaders. Bitcoin does not promote corruption, it fights it.
So there are two ways to read this report. On the IMF side, they will try to make you believe that Bitcoin and cryptocurrencies are associated with corrupt countries by being causes that promote corruption. On my side, I see it as a consequence of the corruption of these countries.
The countries mentioned in the IMF report were already corrupt before Bitcoin was created. Bitcoin has merely provided a weapon for people to free themselves from the oppression and corruption of their leaders. Nothing more, nothing less. As always with the IMF and other global institutions, you must learn to step back and read between the lines.
The IMF's interest is to fight Bitcoin and cryptocurrencies to prevent a majority of the Earth's inhabitants from seeing through the flaws in the current system. They are protecting a system that is doomed to disappear. But this is getting so big, that even the general public is starting to wonder.
The truth is becoming more and more apparent to the general public. Some people just wander without going further, but I am convinced that more and more people will eventually look for a remedy to the flaws of the current system, be it economic, financial, or political.
And when that time comes, Bitcoin will be there to offer them a way out to take care of their future. The warnings of the IMF and the World Bank will not change that.
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The freedoms that bitcoin enables and thus forces governments to find ways beyond oppression to run their countries will only better things for everyone.
Grate article, thanks.