IMF Doesn’t Recommend Marshall Islands To Issue National Crypto
According to the official document published by the International Monetary Fund this regulatory authority is opposed to the intentions of Republic of the Marshall Islands (RMI) to provide cryptocurrency as the second official one in addition to the US dollar.
Regarding the press release, representatives of the Executive Committee recommended Pacific republic's authorities to take into account the "macroeconomic and financial stability risks" at issuing the decentralized cryptocurrency at the state level.
RMI is a Micronesian country which is a member of a free association with the United States. In February this year, the government of the republic considered a draft law aimed at providing the "sovereignty" of the digital currency. Thus, the authorities intend to improve the economic situation in the republic, plus to reduce the probability of RMI isolation from the international financial system.
According to the paper, IMF also explained that due to the climatic vulnerability and the significant factor of natural disasters, RMI has a strong need of the financial partners' help. In case the government of the republic doesn't follow IMF recommendations, the external assistance and all kinds of financial support can be ceased. This will negatively affect the country’s economic sector.
The Central Bank of the republic already has a high risk to lose its correspondent relationship with banks of the US for fiat transactions.
Despite the fact that IMF considers the situation only with RMI, the published report can also relate to the possible implementation of other national cryptos, in general. Representatives of the fund stressed that the intensive growth of a number of crypto assets can damage the stability of the fiat money.
Earlier, the Venezuelan president ordered all banks in the country to accept the digital currency El Petro.