In a blog post, the International Monetary Fund (IMF) says that the technology backing crypto – IE blockchain or distributed ledger technology (DLT) can be used for good. While describing crypto as being more of a disappointment than a revolution, the IMF goes on to recommend more regulation while outlining how the tech can be beneficial.
The IMF says the public sector should leverage DLT to upgrade the payment infrastructure while advocating on behalf of “tokenization, encryption, and programmability.”
Beyond the intrinsic reduction in friction and the need for certain intermediaries, the article notes that a distributed ledger can be widely accessible yet tamper-proof.
These new tools will be more transformative than the first wave of crypto products.
“The tokenization of stocks, bonds, and other assets may cut trading costs, integrate markets, and enlarge access. But paying for such assets will require money on a compatible ledger. One example is stablecoins, are one example to the extent they comply with regulation. More importantly, banks are testing tokenized checking accounts. And automation is widespread, allowing third parties to program functionality much as developers build smartphone apps.”
CBDCs get some attention, too, as the authors believe the tech can provide the infrastructure to settle transactions efficiently in a safe and secure manner.
While there is little new in the blog post that has not been stated elsewhere already it is notable that the IMF is adding its voice in support of blockchain technology.