Having ‘coin’ in its name doesn’t mean Bitcoin is ‘money’

In spite of the fact that the cryptocurrency market and its assets, such as Bitcoin (BTC), are becoming increasingly recognized around the globe, international financial watchdogs are remaining cautious and never cease to warn about the potential risks of this new class asset.

In the newest warning, Kristalina Georgieva, the chief of the International Monetary Fund (IMF), has gone after crypto products, cautioning against confusing such products with currencies during the World Economic Forum (WEF) in Davos, according to a report by NDTV Profit on May 24.

Georgieva reasoned that anything that is not backed by a sovereign guarantee could be an asset class, but not a currency. In the same way, she said, Bitcoin cannot be considered ‘money’ only because there’s ‘coin’ in its name.

Admittedly, she did praise the faster services, much lower costs, and better inclusivity of crypto products, but also stressed that there was a need for more regulation to “separate apples from bananas.”

Her opinions on crypto and Bitcoin were echoed by François Villeroy de Galhau, the Governor of the Central Bank of France, who said that: 

“I always speak of crypto as assets and not as currencies. For any currency, someone has to take the responsibility, but there is no one in case of so-called cryptocurrencies. Also, currencies need to have a lot of trust and they need to be universally acceptable. We cannot have currency on one side and the trust on the other side. They need to be together.”

IMF assistance through regulation

Meanwhile, the IMF is reportedly trying to assist countries in adopting cryptocurrencies, such as identifying crypto regulation as a priority issue in India and providing ‘technical assistance’ to El Salvador but is also claiming that crypto usage is higher in corrupt countries with tighter capital restrictions.

At the same time, IMF’s chief economist Gita Gopinath has earlier expressed opposition to the general prohibition on cryptocurrencies but has agreed that there was a major necessity for the sector to be more regulated, as Finbold reported.