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Even foreseeing the risk of inflation, IMF director does not see Bitcoin as money

In a virtual speech at Bocconi University yesterday (5th), Georgieva cited risks associated with debt and inflation to explain why world economic growth in 2021 will fall below the July projection of 6%. Even knowing this, the director still finds it hard to think of Bitcoin as money.

Even foreseeing the risk of inflation, IMF director does not see Bitcoin as money

Even foreseeing the risk of inflation, IMF director does not see Bitcoin as money

For her, digital currencies backed by central banks (CBDCs) are the most reliable form of digital money.

IMF chief Kristalina Georgieva said on Tuesday (5) that the International Monetary Fund (IMF) forecasts that world economic growth in 2021 will fall slightly below its July projection of 6%, citing risks associated with the debt, inflation and economic divergences in the wake of the Covid-19 pandemic.

Georgieva said the global economy is recovering, but the pandemic continues to limit the recovery.

She said that the report “Global Economic Perspective” to be released next week foresees the return of advanced economies to pre-pandemic economic production levels by 2022, but most emerging countries and developing countries will take “much more years” to recover.

Inflationary pressures, a major risk factor, are expected to ease in most countries in 2022, but are likely to continue to affect some emerging and developing economies, she said, warning that a sustained rise in inflation expectations could cause a rapid rise in interest rates and tighter financial conditions.

During yesterday’s speech, Georgieva further commented on CBDCs, stating that digital currencies backed by central banks are the most reliable form of digital money. At the same time, she believes it is difficult to think of Bitcoin as money.

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“De-facto assets” like bitcoin are not backed by assets that hold their value stable and can rise and fall sharply, Georgieva elaborated, insisting:

“In the history of money, it is difficult to think of them as money.”

In reference to cooperation between international financial organizations and national monetary authorities regarding CBDCs, Kristalina Georgieva further stated:

“[It is] very impressive how much the international community, the central banks, institutions like ours are now actively engaged to make sure that in this fast moving world of digitalization, money is a source of confidence and helps the economy function rather than [being] a risk.”

With informations: news.bitcoin.com

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