The IMF Might Be Considering a Shitcoin
The International Monetary Fund is a predatory lending institution that issues dollar-denominated debts to developing countries. Recent clientele include Argentina, Ecuador, and Greece, whose economies were leveraged to the brink of collapse. What if the IMF could do that, but with a blockchain?
In a recent video, the IMF provides a puzzling explanation of cryptocurrencies that mistakes Bitcoin's features as flaws. At best, the IMF is confused. More likely, they are gaslighting the public to gauge potential reception of an IMF coin.
The explainer begins with some faulty assumptions. First, that transactions are peer-to-peer, permanent, and secured by cryptography. These assumptions only hold true if users run their own nodes on a majority hashrate chain with enough miner decentralization to avoid a 51% attack and chain reorganization.
The narrator identifies the so-called "problems" of cryptocurrencies as anonymity, untraceability, and the possibility that you might misplace your keys. These are all defining features of a bearer instrument, and it is because of these traits that gold served as an international medium of exchange for centuries.
The IMF also complains about cryptocurrency volatility, even though Bitcoin has had the same predetermined issuance rate for over ten years and will continue to do so until the heat death of the universe. Market volatility is largely a side effect of the Federal Reserve's relentless money printing. The fact that the S&P500 is pumping to all-time highs in the midst of a recession should be a good indicator that fiat is not a good measure of reality.
The main purpose of fiat money is to manipulate a nation's economy through the selective allocation of wealth. Lending used to be constrained by assets available, but now loans can be conjured ex nihilo. If the IMF depletes its $1 trillion USD lending capacity, it can allocate Special Drawing Rights for instant liquidity. Instead of allowing debtor countries to default, the IMF issues unsustainable debt to ensure the lenders never take a loss. Meanwhile, the IMF gains influence over the country’s economic policies and can potentially force the sale of strategic assets.
Support for US dollar hegemony has been waning, partly due to the current administration's aggressive and unpredictable foreign policy. China launched the Asian Infrastructure Investment Bank (AIIB) to rival the IMF in international lending, and has been testing a central bank digital currency. The IMF may feel obliged to issue its own cryptocurrency, if only to match the AIIB in lending capacity.
Neither IMF nor AIIB are likely to take advantage of cryptocurrency as a peer-to-peer censorship resistant technology. Instead, it will be an excuse to print more money, the foundations for which are being laid through seemingly innocent video clips.