IMF Answers Inner City Press on Crypto El Salvador and Bitcoin, Exit from Brazil
By Matthew Russell Lee, Patreon Video Podcast
BBC - Guardian UK - Honduras - ESPN
SDNY COURTHOUSE, Dec 16 – When the International Monetary Fund held its biweekly embargoed press briefing on December 16, Inner City Press asked about crypto-currency in El Salvador and beyond, and about the IMF leaving or getting thrown out of Brazil.
Inner City Press asked: "On crypto-currency given the Chief Economists recent comments about the IMF favors regulation over a ban, compared to previous statements on El Salvador, please explain the IMF's current thinking."
Spokesperson Gerry Rice acknowledge the new comments and blog, but reiterated concern about adoption of Bitcoin as legal tender, given volatility. Partial handheld video here; full transcript here:
Matthew Russell Lee, Inner City Press: I've asked you a number of times about cryptocurrency in El Salvador. You've given, you know, the answers that you've given. I saw that the chief economist said, at least to me, something that seems slightly different saying developing economies should regulate it, rather than try to ban cryptocurrency. I just wanted to ask you, maybe is there a new position on this? Is there something -- can you say a little bit more particularly how it might apply to what's been said thus far about El Salvador. And also on -- I just -- I'm sure everyone has seen the spat between Brazil and the IMF. Where does that stand? Is it, I guess, is the current status that the IMF is going to leave the country in June of next year? And what more can you say about it in response? Thanks a lot.
MR. RICE: Thank you. So on crypto currencies, El Salvador, and so on, your first question, your quite right. We did issue a blog actually last week from our monetary and financial counselor, Tobias Adrian (phonetic) and colleagues. And you're quite right to characterize it the way you did, Matthew, which was a call a strong call for regulation in the realm of cryptocurrency. So, so that's quite right. On El Salvador specifically, our view has not changed. We support the authority's efforts to boost financial inclusion and raise growth, but the risks arising from using bitcoin as legal tender need to be addressed. Crypto technologies and digital payment systems have the potential to make payments more efficient, but given bitcoin's high price volatility, its use as legal tender entails significant risks to consumer protection, financial integrity, and financial stability. And it’s used also gives rise to fiscal contingent liabilities. So, our view on what we've said about El Salvador and bitcoin specifically, being used as legal tender, our views there have not changed. I'm essentially, as you know, probably repeating, reiterating what I've said here before. On your question about Brazil, the IMF agreed with the Brazilian authorities to close the IMF representative's office in Brasilia by June 30, 2022, which is what you were saying. And that's when the term of the current IMF representative expires. So, like with many other member countries, the office in Brazil was opened during the time when we had a significant financial arrangement with Brazil. That was its initial purpose. And while that IMF arrangement with Brazil finished, the office was kept open to facilitate dialogue between Fund staff and the authorities, this has happened. This has been the case also with a number of other countries in the past. You know, we would open an office particularly at the time of crisis, at a time when there's a financial arrangement. And then over time we close the office. So, this has happened in the past. I would want to emphasize that we expect the high quality of the Fund's engagement with the Brazilian authorities to continue as we work closely to support Brazil in strengthening its economic policy and institutional settings. So, that would be my comment on Brazil. Thank you very much, Matthew.
In November, Inner City Press asked about Ethiopia and Tigray, Chad and its Glencore debt, and the IMF's status with Zambia. Spokesperson Gerry Rice responded on each. Podcast here. Short video of Q&As on Twitter here. IMF video here, transcript forthcoming.
Answering on Ethiopia, Rice for the IMF said it is "difficult to move forward with program activities" at the moment. Can you say, Tigray? His answer on Chad did not include, as Inner City Press' question had, Glencore. And on Zambia there is not time frame, but talks begin today - virtually.
Back on September 16 Inner City Press asked Rice about crypto-currency legislation in Ukraine and again El Salvador, about the coup in Guinea and the role of the Venezuela talks in Mexico on release of the SDRs. YouTube of IMF video here. Full transcript here.
Inner City Press asked, " what is the IMF's view of Ukraine's move to regulate crypto-currency? Also, the new legislation proposed in Panama, and the implementation of the El Salvador Bitcoin as legal tender bill?" When called on, Inner City Press added that Ukraine would use nuclear reactors' output for mining.
Rice cited an upcoming virtual mission to Ukraine later this month, and said that on El Salvador, the talks are under Article 4, not for a program, as least at this point.
On the Guinea coup, on which the UN of Antonio Guterres has refused to answer Inner City Press' questions, to the IMF Inner City Press asked, " After the coup in Guinea, what has changed in the IMF's approach to the country? What have been the contacts of the IMF in Guinea recently? Same question on Myanmar, and Afghanistan." Rice said the IMF is "watching" Guinea, after citing previous support to the country for COVID response.
How can the UN get away with not answering, and actively blocking, these questions? The IMF will go to Guterres' UNGA week, which is thumbing its nose at NYC with no vaccination requirement. We'll have more on this.
Back on January 8 Inner City Press asked the IMF's Helge Berger, Mission Chief, about China's so-called Belt and Road Initiative: "Your Article IV report cites China's "overseas lending projects" amid "rising geopolitical tensions and economic and trade frictions." How does the IMF think that rising debt levels among African countries, and increased skepticism about the "Belt and Road" will impact or be addressed going forward? -Matthew Russell Lee, Inner City Press. Video here.
(An aside: Inner City Press has reported on the CEFC China Energy Fund Committee's activities in Chad and Uganda and in the UN, on which the UN is UNresponsive.)
Other questions included China's digital currency (Inner City Press also reports on crypto-currency cases in the U.S. District Court for the Southern District of New York and elsewhere). Berger said when used overseas an issue is that residents could start using another country's currency, if it is easier.
We'll have more on this.
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