[HN Gopher] IMF warns El Salvador: "Bitcoin should not be used a...
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IMF warns El Salvador: "Bitcoin should not be used as a legal
tender"
Author : giuliomagnifico
Score : 55 points
Date : 2021-11-23 20:12 UTC (2 hours ago)
(HTM) web link (www.imf.org)
(TXT) w3m dump (www.imf.org)
| cs702 wrote:
| The editorialized title is linkbait, but the actual IMF page is
| an interesting read.
|
| Only one small section of the page, Section 13, actually contains
| the sentence "Bitcoin should not be used as legal tender," but
| the sentence is conditioned on the country properly addressing
| the various risks to financial stability mentioned elsewhere in
| the page. It's unfair to quote only that one sentence, without
| providing any context.
|
| Section 13 is in fact titled "Efforts 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."
|
| --
|
| To the moderators: Please consider changing the editorialized
| title.
| tmaly wrote:
| the title is taken verbatim from the article.
| fabianhjr wrote:
| > El Salvador: Staff Concluding Statement of the 2021 Article
| IV Mission
|
| That is the original title from the article.
| hyuuu wrote:
| of course they'd say that, why would they want to lose the
| ability in destroying countries' financial stabilities?
| BoorishBears wrote:
| Yeah... because being played by random whales and pump and
| dumps has totally different outcomes.
|
| If Bitcoin was actually some country's currency, that country
| would have imploded by now. Hyperdeflation is just as deadly to
| an economy as hyperinflation
|
| -
|
| To the replies about other things affected by those factors:
| You're kind of making my point. We have countries that built
| their economies entirely on oil... the ones that diversified
| seem to be doing just a tad better.
|
| BTC is not saving any economies. It might save some individuals
| which is not nothing, but please let's not pretend the IMF has
| some kind of conspiracy against BTC to maintain their
| control...
| gogopuppygogo wrote:
| Don't use logic and reason in an emotional argument. Bitcoin
| is clearly only going up in value and will be the global
| currency.
|
| If you believe this I have tulips to sell you.
| sMarsIntruder wrote:
| And the pigs are flying
| 0des wrote:
| > being played by random whales
|
| Definitely don't do Forex, or oil, or any commodities trading
| really.
| xxpor wrote:
| Hmm, it's almost like there's a reason why fiat currencies
| took off, and the BTC folks are rediscovering that.
|
| WRT forex trading, has there been a "random whale" event in
| say, a top 15 economy, since Black Wednesday?
| lolinder wrote:
| There's a difference between trading commodities and using
| a currency whose value behaves like that of a commodity. In
| the former case you've willingly taken on risk of price
| fluctuations. In the latter, you're saddled with the risk
| while trying to conduct normal transactions.
| dragonwriter wrote:
| The IMF tends to have influence in a country only after that
| country has managed to destroy its own stabilities.
|
| (That's not to say that their help doesn't tend to have adverse
| side effects, just that the IMF isn't generally doing anything
| to your economy if you have stability around to destroy.)
| aqme28 wrote:
| I don't know what point you're trying to make.
|
| "They're not so bad. They only exploit the desperate."
| dragonwriter wrote:
| > I don't know what point you're trying to make.
|
| That the description of them destroying stability has a
| false premise. I mean, how much more explicit could be?
|
| If you are looking for a secret ulterior motive, the
| difficulty is because there isn't one.
| yongjik wrote:
| Are you talking about IMF or Bitcoin?
|
| More seriously, that's not what GP meant at all. GP's point
| is that IMF usually steps in only after a country managed
| to paint itself into a financial corner - at this point
| there's no "nice" solution any more, and you're guaranteed
| to deal with mass unemployment, people losing their life
| savings, inflation, and so on.
|
| Of course the debate is ongoing whether IMF's proposed
| solutions are actually in the best interest of the
| countries on the receiving end, but you know, if they don't
| like the deal these countries can always refuse it.
| [deleted]
| 0des wrote:
| It is hard not to interpret this as posturing to head off any
| wise ideas by the only country in a dire enough situation to be
| swayed by it. Normalizing BTC or other cryptoassets as a
| transactional currency rather than an asset reframes the way it
| is treated tax-wise, another interpretation is that it threatens
| their power structure, which one could imagine challenges the
| IMF's business model as they're a cooperative of entities
| focusing on guiding how money is used, distributed, managed, and
| created. Those controls become hard to enforce on Bitcoin or
| other cryptoassets when it goes from asset class to transactional
| class.
| ckdarby wrote:
| Can someone with expertise or background chime in why the IMF is
| even making this statement?
| josh_today wrote:
| IMF is the closest thing we have to a global entity responsible
| for managing currency supply and distribution.
|
| Bitcoin undermines their existence.
| [deleted]
| 0des wrote:
| Hello, just a heads up, your account is shadow banned, and
| unless someone who sees it 'vouches' for your comments, they
| wont be seen by normal users.
| grzm wrote:
| They are not shadow banned. They were explicitly banned.
|
| https://news.ycombinator.com/item?id=29091010
|
| If there's something in the comment you want to respond to,
| great: then add your comment.
| AnimalMuppet wrote:
| So, um, what does "banned" mean if they can continue to
| post?
| grzm wrote:
| As typically used, the term "shadow banned" is a ban
| without alerting the user that they are banned. That's
| not the case here. On HN, "banning" means to to have your
| posts be dead by default. And "banned" is the language
| 'dang himself used in the message to the user.
| 0des wrote:
| There are also numerous bans with no notice at all, just
| a sudden stream of gray comments that are 0 minutes old.
| grzm wrote:
| Yes, there is also autobanning and filtering software.
| But that is not what happened here.
| betwixthewires wrote:
| Is mine?
| Vecr wrote:
| No.
| rudian wrote:
| I'm a normal user and I can see their message. Has it been
| vouched for in the past 4 minutes? My settings are still
| the HN defaults.
| 0des wrote:
| I vouched for it so that I could reply.
| [deleted]
| elliekelly wrote:
| Bitcoin is very volatile and offers no consumer protection
| whatsoever. If a developing nation encourages citizens to buy
| into Bitcoin for use as legal tender and then Bitcoin crashes
| (leaving the citizens who bought it with nothing) the result
| would be an international financial crisis and the IMF would
| step in to help resolve the matter.
| [deleted]
| chucktingle wrote:
| Bukele is shorting the dollar by issuing dollar bonds and
| buying Bitcoin. Of course, the IMF is not happy.
| dragonwriter wrote:
| > Can someone with expertise or background chime in why the IMF
| is even making this statement?
|
| Because the IMF is right now deeply involved in "stabilizing"
| Costa Rica's economy, notionally for effects of the pandemic,
| at the government's request.
| elliekelly wrote:
| The relevant bit:
|
| > 13. Efforts 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.
| thirdplace_ wrote:
| It surprises me why bitcoin isn't banned yet. It is a credible
| threat to internal revenue services all over the world.
| felistoria wrote:
| Good
| servytor wrote:
| I highly recommend anyone who doesn't know anything about how the
| IMF interacts with poor countries to watch this documentary
| called "Life and Debt"[0] which is about how the IMF basically
| destroyed Jamaica's economy.
|
| Basically, long story short, the IMF will immediately tell a
| country that they cannot bolster their local companies with
| tariffs or other legal means, meaning that local food industries
| (in the example of Jamaica) and numerous other sorts of local
| businesses immediately go bankrupt due to competition, and
| joblessness soars.
|
| So the IMF will immediately take advantage of a country and kill
| basically any law that they have to try and bolster their local
| economy, in the need for the 'greater good'. Gorramn Tau.
|
| [0]: https://en.wikipedia.org/wiki/Life_and_Debt
| dbs wrote:
| [0]: https://en.wikipedia.org/wiki/Life_and_Debt
|
| It would be good to find a review (positive or negative) of
| that movie by economists, not movie critics. Until then, call
| me a skeptic.
| TaylorAlexander wrote:
| Here's another one, "War by Other Means" by John Pilger:
|
| https://youtu.be/9Pi1sHbXWXw
| splix wrote:
| Also "Princes of the Yen", it mentions how IMF took advantage
| over Asia https://www.youtube.com/watch?v=5-IZZxyb1GI
| TaylorAlexander wrote:
| Great thank you. I am very interested in alternative ways
| to organize the global economy that are more equitable and
| fair so I appreciate the link.
|
| I should also mention Naomi Klein's No Logo.
| https://www.youtube.com/watch?v=oeTgLKNb5R0
| [deleted]
| ChrisLomont wrote:
| Instead of only looking at one side, consider the IMF is mostly
| a lender of last resort. So when a country needs IMF help, it's
| IMF or likely even worse outcomes.
|
| If you want a more accurate view, read research papers on
| google scholar. Here's papers on IMF from 2017 [1].
|
| The short take is the IMF provides lots of help to ailing
| countries, saves some and loses some. Pop culture doesn't tend
| to spread news of the winners since spreading lopsided
| arguments sells more books and blog posts.
|
| Google scholar is a much more balanced and accurate place.
|
| [1]
| https://scholar.google.com/scholar?as_ylo=2017&q=imf&hl=en&a...
| smoldesu wrote:
| I'll trust a press release from The Muppets before I take a
| recommendation from the IMF seriously.
| jascii wrote:
| The Muppets don't have a big stick to wield in the form of
| advising their member states to withhold aid, commerce, etc...
| zingplex wrote:
| While I don't disagree that IMF recommendations should be taken
| with a grain of salt, they're hardly the only people speaking
| out to say this is a bad idea. There has been mass protest
| against the adoption of Bitcoin across the country citing fears
| around the stability of the cryptocurrency.
|
| https://www.bbc.com/news/world-latin-america-58579415
| leishman wrote:
| There have not been "mass" protests. They have been quite
| small. And a large chunk of those protestors are countryside
| people paid by US funded NGOs. I've been to ES multiple times
| recently. The fact is most people there are ambivalent about
| Bitcoin and don't have a strong opinion about it.
| chrononaut wrote:
| > I've been to ES multiple times recently. The fact is most
| people there are ambivalent about Bitcoin and don't have a
| strong opinion about it.
|
| https://www.reuters.com/technology/majority-salvadorans-
| do-n...
|
| > SAN SALVADOR, Sept 2 (Reuters) - Most Salvadorans
| disagree with the government's decision to adopt bitcoin as
| legal tender, with many unaware of how to use the digital
| currency and distrustful of the project, a poll by the
| Central American University (UCA) showed on Thursday.
|
| > At least 67.9% of 1,281 people surveyed said they
| disagree or strongly disagree with the use of bitcoin as a
| legal tender, said the poll by UCA, a Jesuit university
| based in El Salvador. Just over 32% of people said they
| agree on some level.
|
| Seems the majority of people disagree with this action.
|
| > And a large chunk of those protestors are countryside
| people paid by US funded NGOs.
|
| That's a broad claim, of which I don't find any evidence.
| Do you have references here?
| rudian wrote:
| Most people are ignorant about Bitcoin and its risks; The
| fact that there are no protests should come as a surprise
| to no one.
|
| What people see is that they get free money from the
| government and maybe they're lucky to see it go up. They
| don't know it could be half tomorrow.
| smoldesu wrote:
| I actually agree with you. I just think that an IMF
| recommendation against using non-dollar-backed currency is
| hysterical, because _of course_ they 'd think that's a bad
| idea. They rely on adjusting inflation to exacerbate their
| own wealth, and when decentralized currency gets into the
| mix, it obviously complicates matters.
|
| Cryptocurrency as a primary method of transaction is 31
| flavors of Baskin-Robin disaster. That doesn't make it any
| less funny when the IMF is complaining about a loss of
| control.
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(page generated 2021-11-23 23:02 UTC)