The International Monetary Fund Strong Arms Argentina Away from Crypto
After years of threats from the IMF about cryptocurrency, Argentina just took a $45B loan with the stipulation that they ban cryptocurrencies.
The International Monetary Fund (IMF) is the world’s largest financial consortium–think of it like the UN for money. Like every other major financial institution, it targets a few major missions, and the big players take priority over everyone else.
According to the IMF website, the IMF works to achieve sustainable growth and prosperity for all of its 190 member countries. The IMF has three critical missions: furthering international monetary cooperation, encouraging the expansion of trade and economic growth, and discouraging policies that would harm prosperity.
Often the biggest influence the IMF has is through loans. To keep the global economy more stable, the IMF will lend money to struggling countries. Along with these loans come demands, though.
In recent years, we’ve seen the IMF taking strong stances against cryptocurrencies as more countries adopt assets like Bitcoin, with the threat of losing access to IMF lending. The IMF levied these threats against El Salvador when the country moved to adopt Bitcoin as official tender, and recently they “urged the authorities to narrow the scope of the Bitcoin law by removing Bitcoin's legal tender status.” El Salvador’s Treasury Minister angrily responded “Countries are sovereign nations and they take sovereign decisions about public policy.”
Now two more countries are getting the El Salvador treatment. The Central African Republic recently adopted Bitcoin as legal tender, which prompted an IMF statement: “The adoption of Bitcoin as legal tender in C.A.R. raises major legal, transparency, and economic policy challenges.”
More notably, Argentina recently accepted a $45B loan from the IMF which came with the stipulation that they limit the use of and access to cryptocurrency by their financial institutions. Here is the IMF’s official statement on Argentina’s loan:
To further safeguard financial stability, we are taking important steps to (i) discourage the use of crypto-currencies with a view to preventing money laundering, informality, and disintermediation,” to strengthen the country’s financial resilience.
The IMF’s official stance is that cryptocurrencies allow money laundering, but the real story is likely closer to that of the US Federal Reserve: a lack of control.