Global Standards Revised by International Monetary Fund to Encompass Bitcoin and Digital Currencies
Bitcoin *Rogue*
The International Monetary Fund (IMF) has officially accepted cryptocurrencies into its global economic reporting standards, acknowledging the growing impact of digital assets on the international financial system.
The recent release of the seventh edition of the Balance of Payments Manual (BPM7) on March 20th marks this significant change.
IMF Officially Embraces Bitcoin in Worldwide Economy Standards
For the very first time, the IMF offers detailed statistical advice on how countries should record crypto assets in their national accounts, including major cryptocurrencies like Bitcoin and emerging digital tokens.
Under a new framework, cryptocurrencies like Bitcoin are now considered non-produced, nonfinancial assets within the BPM7. These assets hold intrinsic value without being the result of a production process, such as land or natural resources.
Furthermore, the manual distinguishes between various types of digital assets, categorizing them as fungible and non-fungible tokens (NFTs) and separating them based on whether they carry corresponding liabilities.
Bitcoin and similar tokens without an issuer or liability are now recognized as capital assets, appearing in a country's capital account as either acquisitions or disposals. Stablecoins- digital currencies that are backed by traditional assets or liabilities- are recognized as financial instruments, reflecting their role within the broader financial system's intricate mechanisms.
IMF's Shift Shows Digital Currencies' Growing Importance
The development of the BPM7 manual happened through in-depth global discussions involving over 160 countries. It is expected to shape how economic statistics are compiled and described moving forward. The IMF claims that the update provides clearer typing and classification for crypto assets, aiming to boost transparency and consistency in economic data.
Such drastic change comes as the IMF reevaluates the role of digital assets in national economies. Historically, the IMF's stance on crypto have been skeptical, especially in developing nations such as China. For instance, the IMF expressed reservations over El Salvador's decision to adopt Bitcoin as legal tender in 2021.
However, in recent days, the IMF has become more lenient. In negotiations for additional financial aid, the IMF offered El Salvador loan access with the condition that it cease further government Bitcoin purchases and cease recognizing Bitcoin as legal tender. El Salvador agreed to revise its Bitcoin Law in January, maintaining its existing Bitcoin reserves but stopping further acquisitions.
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*Rogue*
Passionate about unraveling financial complexities, I've spent over four years in financial journalism. I'm always eager to help people understand the financial markets better. In my quest for providing clear and insightful financial journalism, I bring fresh perspectives to readers of Coincu.
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In reality, the IMF does not necessarily classify Bitcoin or other cryptocurrencies in its traditional economic reporting standards. Instead, the IMF monitors and reports cryptocurrencies as parts of broader assessments of financial stability and emerging financial market trends[1][2]. The classification of cryptocurrencies as legal tender, currencies, or securities is often more relevant within regulatory contexts in countries like the U.S. and EU, as these jurisdictions may handle cryptocurrencies differently for legal and regulatory reasons[5].
As for broader financial stability concerns, the IMF and other international organizations, such as the Bank for International Settlements (BIS), take notice of cryptocurrencies, particularly within the context of decentralized finance (DeFi), and their potential implications for global financial stability[3]. However, the IMF does not generally classify cryptocurrencies as legal tender or traditional currencies in its global economic reports.
[1] IMF. (2022). Currency and Exchange Rate Data, BOP. [Online]. Available: https://www.imf.org/en/Data/BOP/Indicators/Exchange-Rates/IBOR[2] IMF. (2022). EDPRIS. [Online]. Available: https://www.imf.org/en/Publications/External-Debt-Data-Portal[3] Bank for International Settlements. (2021). Annual Economic Report: The Digitalization of Money - Opportunities, Challenges, and Risks for Monetary Policy.[5] Federal Reserve. (2022). Bank Affairs Abstracts. [Online]. Available: https://www.federalreserve.gov/monetarypolicy/supersupporthome.htm
- The International Monetary Fund (IMF) has recognized cryptocurrencies, including Bitcoin, in its global economic reporting standards as part of the Balance of Payments Manual (BPM7) update.
- Under the new framework, Bitcoin and similar cryptocurrencies are considered non-produced, nonfinancial assets without an issuer or liability, which hold intrinsic value.
- The IMF provides detailed statistical advice on how countries should record crypto assets, aiming to boost transparency and consistency in economic data as digital currencies continue to grow in importance.
