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CAN BITCOIN REPLACE USD?.....IMF Could Issue International Cryptocurrency to Replace Dollar?

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THE WORLD may soon have an institutional backed cryptocurrency issued by International Monetary Fund IMF in response to the razzmatazz of bitcoin. According to the Wall Street Journal, the story comes as a response to recent comments by Christine Lagarde, head of the International Monetary Fund (IMF), encouraging banks and governments to not short-change Bitcoin and other cryptocurrencies.

Fireinthebone gathered that after the announcement by the government of Dubai of its intention to issue a state cryptocurrency, banks and large number of financial institutions are having as change of mind in support of  state-issued coins as the Blockchain hype continues.

But the real challenge of a global digital currency will be the centralization factor and how to deal with it. As you may know, major part of the appeal of cryptocurrencies like Bitcoin is the decentralized protocol, creating a free market where value is based purely on consensus without price fixing.

A globalized digital currency, while providing decentralized security, would require the IMF to fix and regulate values in order to manage the flow of money in and out of different countries. Such a system would run contrary to the underlying principles behind Bitcoin.

The dollar as the reserve currency for much of the world’s economic transaction means that some major global economies may want a new digital currency to function as the reserve. The IMF coin could potentially replace the dollar in that context, should it become widely accepted. In such a case, the dollar and other national currencies would be restricted to local markets.

Some supporters of Bitcoin would argue that there is no need for such a currency from the IMF, since Bitcoin already exists, and without the centralization risks. 

FIRE: - This could be a good idea, but certainly one that will meet the brickwall sooner than later.  Are you contemplating that Bitcoin will displace USD and other first grade currencies across the globe, with its implications?. That could also mean displacing major financial equations and institutions on a large scale.


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