The international monetary Fund (IMF) spoke out against the issue by the Republic of the Marshall Islands to issue a national cryptocurrency as a second legal tender in the country along with the US dollar.
Plans to launch a digital currency called Sovereign island nation announced in February of this year. The purpose of this step was called support for the economy and reduce risks from possible disconnection of the country from the global financial system.
The IMF, after consultations with officials of the Marshall Islands signed a document which opposed the release of the country’s digital currency.
The Fund noted that the economy of the Marshall Islands is largely dependent on external assistance as the country faces the effects of climate change, natural disasters and reduction of financial support from the United States. The only local commercial Bank risks losing its correspondent relations in us dollars with us Bank due to the tightening measures of due diligence in financial institutions in the United States.
In the opinion of the Directors of the IMF, the issue of cryptocurrencies in the absence of comprehensive measures to combat money laundering can lead to the fact that the US Bank would stop relations with the country. At the moment the official currency of the Republic is the U.S. dollar.
“In the absence of adequate risk mitigation measures the issue of the decentralized digital currency as a second legal tender not only increase the risks of macroeconomic and financial integrity, but also risk the final loss of correspondent relations in U.S. dollars”, — said Directorate of the Fund.
In this case, the document says, external financial aid and other flows can be disrupted, which will lead to a significant reduction in the country’s economy.
Recall that according to the IMF cryptocurrencies do not threaten global financial stability, the Fund urged Central banks to compete with new assets, for example, by issuing digital currency Central Bank (CBDC).