The International Monetary Fund (IMF) hasn’t warmed up to crypto.
Its high-profile economists, Tobias Adrian and Rhoda Weeks-Brown, argue that widespread Bitcoin adoption could lead to macroeconomic instability in a recent post.
They believe that businesses would have to spend significant resources to integrate a cryptocurrency instead of focusing on "productive" things.
The introduction of Bitcoin could make prices fluctuate due to Bitcoin’s high level of volatility.
Adrian and Rhoda Weeks-Brown also point to widespread crime and fraud in the cryptocurrency market:
Environmental sustainability was also among the top concerns raised by the IMF in the blog post.
Households and businesses could lose wealth through large swings in value, fraud, or cyber-attacks. While the technology underlying cryptoassets has proven extremely robust, technical glitches could occur. In the case of Bitcoin, recourse is difficult as there is no legal issuer.
El Salvador, a tropical nation in Latin America, became the first country to adopt Bitcoin as an official currency alongside the U.S. dollar.
However, the IMF—which is talks to give El Salvador a $1 billion loan—was quick to criticize the move.
According to a recent poll, a whopping 96 percent of Salvadorian entrepreneurs oppose mandatory Bitcoin acceptance.