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Chukwuemeka Raphael
May 19, 2022
by Chukwuemeka Raphael

IMF Sanctions: Barrier to Crypto Adoption?

IMF Sanctions
1944 marked the founding of the International Monetary Fund (IMF). About 190 countries in its membership rely on it for exchange rate stabilization. In response to the emergence of cryptocurrencies over a decade ago, the International Monetary Fund (IMF) emphasized that this development can make the financial system of countries porous since the market is not regulated. IMF sanctions

El Salvador suffered IMF sanctions for adopting Bitcoin as a legal tender and making purchases of more Bitcoin during dips. Just a few weeks ago, the Central African Republic (CAR) joined El Salvador in adopting Bitcoin as a legal tender. This action brought a lot of criticism to the government of CAR by the International Monetary Fund and other international institutions.

The fear of IMF sanctions could impact negatively on the speedy adoption of cryptocurrencies in the following ways:

  • Fear of open support for cryptocurrencies by countries

  • Imposition of laws preventing citizens from participating in Crypto activities

    • Fear of Open Support for Cryptocurrencies by Countries

    The membership had 190 countries in total. Due to the fear of sanctions, only a few countries in the membership adopted cryptocurrencies as legal tender. They worried these IMF sanctions would prevent them from accessing international loans during any financial crisis. Different countries that understand the importance of cryptocurrencies in the long term seek this support to align with the position of the International Monetary Fund. This fear reduces cryptocurrency adoption.

    Imposition of Laws Preventing Citizens from Participating in Crypto Activities

    Since the cryptocurrency market is porous, volatile, and unregulated, the International Monetary Fund suggests conducting more studies. Countries that support this stand have access to technical support, loan support, and structural adjustment. It ensures that recipient nations maintain strict monetary policies. It also inspires these governments to make laws that prohibit all forms of cryptocurrency activities by the citizens and businesses within their jurisdiction.

    In conclusion, the fears of the International Monetary Fund are valid since they do everything to uphold the mandate that led to its creation due to the world economic crisis orchestrated by the Second World War. However, this directly impacts the adoption of Cryptocurrency in some countries negatively.

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    IMF Sanctions: Barrier to Crypto Adoption?
    Chukwuemeka Raphael
    Chukwuemeka Raphael is an author and cryptocurrency news writer/analyst. As a Mathematics graduate and trained analyst, he combines his Math knowledge and strong reading culture in contributing content and analysis for the development of cryptocurrency and blockchain space.

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