In its latest report entitled “Five Facts on Fintech,” the International Monetary Fund (IMF) said that based on its research, countries generally foresee the emergence of crypto assets backed by central banks.
The study, which surveyed central banks, finance ministries, and other government agencies in 189 countries, explicitly stated that central bank-backed crypto assets are likely to emerge due to lowering costs and increasing efficiency.
Could it threaten bitcoin and the rest of the crypto market?
The IMF cited “countering competition from cryptocurrencies” as one of five main reasons behind the potential emergence of central bank-backed crypto assets, indicating that bitcoin and other major crypto assets are seeing an increase in adoption as an alternative to existing assets.
The IMF’s report read:
“The survey reveals wide-ranging views of countries on central bank digital currencies. About 20 percent of respondents said they are exploring the possibility of issuing such currencies. But even then, work is in early stages; only four pilots were reported. The main reasons cited in favor of issuing digital currencies are lowering costs, increasing efficiency of monetary policy implementation, countering competition from cryptocurrencies, ensuring contestability of the payment market, and offering a risk-free payment instrument to the public.”
In its 2018 report entitled “Global Financial Stability Report,” the IMF said that crypto assets have “features that may improve market efficiency” but could also pose risks to global financial stability if it evolves into a major asset class without safeguards.