Stablecoin Adoption Could Stifle Central Bank Control, IMF Warns

[zasad@]

Stablecoins could make monetary policy less effective in some nations, the IMF said.
https://decrypt.co/350996/stablecoin-adoption-could-stifle-central-bank-control-imf-warns
The organization pointed to stablecoins’ ability to “penetrate an economy.”
So far, an overwhelming majority of stablecoins have been tied to the U.S. dollar.
Stablecoins have the potential to broaden individuals’ access to financial services, but that may come at the cost of central banks, according to the International Monetary Fund.

In a 56-page report published on Thursday, the international organization identified “currency substitution” as a potential risk that stablecoins pose, describing the dynamic as something that could incrementally erode the financial sovereignty of various nations.

Historically, if an individual wanted access to the greenback, they would typically be required to hold physical cash or open a certain type of bank account. However, “stablecoins can penetrate an economy rapidly via the internet and smartphones,” the IMF noted.

[_act_]

I do not know the reason IMF is called International Monetary Fund, they are IFF which is International Fiat Fund. Anything that is against fiat is not what they can support. Only what they want is the fiat that they can easily control and be manipulated by the government.

IMF advised against bitcoin also even as bitcoin posed no risks, they are still advising against its adoption. I can not believe anything this Fiat Fund Organization is saying about competitive assets.

[Z-tight]

Not surprising coming from the imf, left to them they would prefer nobody adopts crypto and we all stick to fiat and their pro-vigilance cbdc's. No wonder they say this:

If foreign currency-denominated stablecoins become entrenched through payment services, local alternatives like a central bank digital currency, or CBDC, could have difficulty competing,

Part of their worry is that with stablecoins, people would probably not see any need to use cbdc. I would even go further to say that even without stablecoins, i would never recommend anyone to use cbdc's. There are so many digital payment options available, which makes cbdc's redundant and the government knows this.

[zasad@]

I do not know the reason IMF is called International Monetary Fund, they are IFF which is International Fiat Fund. Anything that is against fiat is not what they can support. Only what they want is the fiat that they can easily control and be manipulated by the government.

IMF advised against bitcoin also even as bitcoin posed no risks, they are still advising against its adoption. I can not believe anything this Fiat Fund Organization is saying about competitive assets.

I view this news as a big circus. The International Monetary Fund will support fiat and everything related to it. But what are stablecoins?
These are tokens backed by US Treasuries (usually 75% or more) and fiat currency held in bank accounts.
With the widespread adoption of cryptocurrencies and stablecoins, central banks will lose their influence, and banks are actively contributing to this by creating numerous problems for their clients when transferring money.

[BlackHatCoiner]

Part of their worry is that with stablecoins, people would probably not see any need to use cbdc.

Unpopular take: stablecoin is a central bank digital currency. Fiat is a CBDC. You're just used to using it via commercial banks or fintech companies and not directly from a "Fedcoin wallet" application. But, a stablecoin is exactly that. The whole fear of an upcoming "CBDC" is a psyop to distract you from fiat.

The reason the central banks don't like stablecoins, as I see it, is that it drives people into bitcoin. Sure, Tether becomes a fiat bagholder, but the amount of money they bring into treasuries is really miniscule, while the process of people getting used to private keys and wallets etc., can make the transition to holding bitcoin a lot easier, and that's absolutely against the central bankers' interest.

[Free Market Capitalist]

Unpopular take: stablecoin is a central bank digital currency. Fiat is a CBDC. You're just used to using it via commercial banks or fintech companies and not directly from a "Fedcoin wallet" application. But, a stablecoin is exactly that. The whole fear of an upcoming "CBDC" is a psyop to distract you from fiat.

Well, for me there is an essential difference between the central bank having all the information and control over the currency you use at the click of a button and there being private intermediaries. As of today if the government, or the central bank, wants to know what I do with my credit card, it has to obtain a court order. That is essentially different.

That in the end the base currency is the same fiat garbage, we agree on that.

[zasad@]

Unpopular take: stablecoin is a central bank digital currency. Fiat is a CBDC. You're just used to using it via commercial banks or fintech companies and not directly from a "Fedcoin wallet" application. But, a stablecoin is exactly that. The whole fear of an upcoming "CBDC" is a psyop to distract you from fiat.

Well, for me there is an essential difference between the central bank having all the information and control over the currency you use at the click of a button and there being private intermediaries. As of today if the government, or the central bank, wants to know what I do with my credit card, it has to obtain a court order. That is essentially different.

That in the end the base currency is the same fiat garbage, we agree on that.

In my country (Russia), banks are required to disclose all data on bank accounts and fund movements upon the first request of a tax inspector, without the need for a court or prosecutor's permission.
All transactions involving stablecoins can be tracked on the blockchain.
It seems to me that the days when banking secrecy was truly secret are long gone.

[Free Market Capitalist]

In my country (Russia), banks are required to disclose all data on bank accounts and fund movements upon the first request of a tax inspector, without the need for a court or prosecutor's permission.
All transactions involving stablecoins can be tracked on the blockchain.
It seems to me that the days when banking secrecy was truly secret are long gone.

If you had an account with a card from, for example, Wise, the tax inspector would not be able to access it directly. Although I don't know if that is prohibited in Russia. From EU countries, if the government wants to know what you are doing with Wise, it has to obtain a court order.

[BlackHatCoiner]

Well, for me there is an essential difference between the central bank having all the information and control over the currency you use at the click of a button and there being private intermediaries.

A central bank digital currency is obviously worse than Wise, because everything is de facto recorded and can be used to enforce further compliance even for previously insignificant things, like for the food you buy at a grocery store, but my point is that the main problem of the world is not privacy invasion. It is inflation, and people often end up to the surreal position to support fiat, just to show their opposition to CBDC.

You should obviously be against CBDC, but it also seems obvious to me that this is a psyop to distract you from a $36 trillion debt that compounds faster than the ability to pretend it's fine.

[Z-tight]

The reason the central banks don't like stablecoins, as I see it, is that it drives people into bitcoin. Sure, Tether becomes a fiat bagholder, but the amount of money they bring into treasuries is really miniscule, while the process of people getting used to private keys and wallets etc., can make the transition to holding bitcoin a lot easier, and that's absolutely against the central bankers' interest.

I have not thought about it in this way. Do you believe that people who have never used BTC and have only been exposed to stablecoins can transition to BTC easier because of their exposure to private keys and crypto wallets. I kinda believe it is the other way round, were people who use BTC and other crypto adopt stablecoins in some way or another, either as traders, for temporary use only or to 'protect' their coins from volatility.

[BlackHatCoiner]

Do you believe that people who have never used BTC and have only been exposed to stablecoins can transition to BTC easier because of their exposure to private keys and crypto wallets.

Absolutely, and I have anecdotal evidence. For many people who used Tether as currency for gambling sites, it was easier to understand the concept of self-custodying bitcoin.

I kinda believe it is the other way round, were people who use BTC and other crypto adopt stablecoins in some way or another, either as traders, for temporary use only or to 'protect' their coins from volatility.

There's absolutely a large part of the crypto space that simply wants to maximize their fiat gains and could not care less about bitcoin and what it represents. I used to criticize people who don't view bitcoin the same way I do, but on the other hand, I observe that stablecoins like Tether provide a real world use case that can actually save a lot of people, by holding a relatively stable currency (USD) instead of being bagholder of their government's shitcoin that is more inflationary than USD. It's not a mere coincidence that Tether is rapidly growing in adoption in hyperinflationary economies. These people didn't have access to holding a less inflationary fiat currency, but they now do, and there's apparently demand for it.

[zasad@]

In my country (Russia), banks are required to disclose all data on bank accounts and fund movements upon the first request of a tax inspector, without the need for a court or prosecutor's permission.
All transactions involving stablecoins can be tracked on the blockchain.
It seems to me that the days when banking secrecy was truly secret are long gone.

If you had an account with a card from, for example, Wise, the tax inspector would not be able to access it directly. Although I don't know if that is prohibited in Russia. From EU countries, if the government wants to know what you are doing with Wise, it has to obtain a court order.

This isn't prohibited, but I'm required to notify my tax office within 30 days and then file a report on the account's transactions. If I don't, I'll be fined for an administrative violation, but if the turnover is significant and taxes are unpaid, I could face criminal charges.
I think that in Europe too, citizens are required to declare their income, even if their bank account is opened in another country.

Russian citizens typically open such accounts for small purchases. The fine for such a violation is $60 if discovered by the tax authorities, but most of my friends don't declare anything.

[Z-tight]

These people didn't have access to holding a less inflationary fiat currency, but they now do, and there's apparently demand for it.

The way i see it now, i think i do understand your point. I.e. for people who live in Venezuela, Zimbabwe and other countries whose economy and currency suffers from hyperinflation, stablecoins backed by the usd is a life-saver for them. And for such people, protecting their funds from devaluation is their major cause at the time. But over time it could arouse their interest in a decentralized, censorship resistant currency like BTC, one that will not only hedge their funds against inflation, but it is also volatile and can generate returns for them in the long run.

[Free Market Capitalist]

I think that in Europe too, citizens are required to declare their income, even if their bank account is opened in another country.

Not yet but it depends on the country. Typically you don't need to declare a foreign account if you just have a couple of thousand there. But sadly, with the direction the EU is taking, I believe we are heading towards a model where they will require you to declare every cent you have and every transaction you make.

[zasad@]

I think that in Europe too, citizens are required to declare their income, even if their bank account is opened in another country.

Not yet but it depends on the country. Typically you don't need to declare a foreign account if you just have a couple of thousand there. But sadly, with the direction the EU is taking, I believe we are heading towards a model where they will require you to declare every cent you have and every transaction you make.

A couple of thousand euros is a small sum in Europe, but by law, citizens are required to declare all their income if they are tax residents.
This creates a paradox: citizens aren't required to declare accounts in other banks, but they must file an income tax return. So how do you do that?

It turns out to be the same as in Russia. If the tax authorities receive this information, they'll issue a fine or an order to file a tax return.