The growing use of cryptocurrencies and similar digital assets in the world has never had the support of the International Monetary Fund (IMF) and its position remains unchanged to this day. Recently, representatives of the organization warned Zimbabwean authorities about the risks of launching a gold-backed central bank digital currency (CBDC) as an alternative to the US dollar.
The IMF fears that the new digital asset will bring no benefit to the country’s economic system. The fund believes that Zimbabwe should liberalize the foreign exchange market instead of adopting a gold-backed digital currency. According to the Bitcoin.com portal, an anonymous source familiar with the matter said that the potential risks of the new measures need to be carefully assessed, the benefits of which are likely to outweigh macroeconomic and financial stability risks, as well as legal, operational and other risks.
The African country is known to have started exchanging a small amount of Zimbabwean dollars for digital gold-backed tokens to allow the population to save from market fluctuations. It is believed that the use of the state stablecoin can partially cope with inflation in the country.
The IMF has reportedly contacted the Zimbabwean authorities, warning them against adding “crypto-like” assets to the local financial system. As an alternative, representatives of the International Credit Organization suggested that the Zimbabwean authorities should implement a tight monetary policy in addition to liberalizing the foreign exchange market to protect the country from market shocks.
However, this isn’t the first time the IMF has opposed the introduction of digital assets into the economy. The organization previously criticized the Central American country of El Salvador for integrating Bitcoin into the traditional state system where the US dollar officially circulates. In 2021, El Salvador became the first country in the world to legalize bitcoin as official tender, on par with the US dollar. Later in 2022, the IMF forced debt-ridden Argentina into a deal that “prevented” cryptocurrency adoption in exchange for bailouts.