IMF Acknowledges Bitcoin’s Economic Potential

In a new report, the International Monetary Fund (IMF) examined the first cryptocurrency and its impact on global markets. The organization recognized the asset’s ability to positively influence the economy.

According to the IMF, digital gold is a “key to autonomy” for many countries in difficult financial situations. The report notes the growing popularity of bitcoin and its acceptance in various jurisdictions. 

Cryptocurrency has long been viewed by many investors as a potential means of portfolio diversification, researchers believe.

The tense geopolitical situation has made assets like bitcoin and gold “more relevant.” The IMF emphasized that these qualities make the coin an important link for emerging world economies.

Over the past year, the financial industry has undergone “massive digitalization,” in which the first cryptocurrency played a central role, the organization asserts. 

The IMF also delved into the mechanics of cross-border bitcoin use, relying on on-chain and off-chain data. The analysis revealed clear patterns in the coin’s behavior compared to traditional assets, especially in how they respond to global economic changes.

While TradFi inflows decrease during a surge in the US dollar, bitcoin transactions tend to increase, likely due to its appeal “as an anti-inflation tool.” 

The report highlights the significant impact of operations with the first cryptocurrency on the gross domestic product of several countries:

“This underscores their importance not only from an economic strategy perspective but also their potential to support regions with limited access to traditional capital flows.” 

Analysts added that on-chain bitcoin transactions often involve large sums and mainly depend on blockchain security features and fee structures. Meanwhile, off-chain flows are usually associated with attempts to bypass geopolitical and economic restrictions.

Earlier, the IMF recognized the benefits of stablecoins and CBDCs for remote regions. Experts believe that such assets will help improve the accessibility and quality of financial services for island nations. 

In February, the organization warned Pacific nations against adopting digital assets. However, the fund acknowledged that certain regional characteristics make the use of crypto payments very effective. 

Back in January, IMF chief Kristalina Georgieva stated that cryptocurrencies are merely an investment tool.