Wednesday, April 18, 2018

What the IMF Head thinks about Crypto

Even the IMF Head understands that there are good stuff about crypto.


1) Fast and inexpensive financial transactions
2) Self-executing and self-enforcing smart contracts eliminates the need for some intermediaries
3) Secure storage of information (ability to give permissioned access to confidential data)
4) Increases asset ownership rights in places with subpar record keeping

Admittedly, she did come out with another post a month ago about the negatives of crypto, it is clearly obvious that the IMF have been studying virtual currencies quite intensely.

One important point that I find her post missing, almost on purpose, is regarding that view that (at least the legit ones) virtual currencies are a form of private money, which is free from government intervention. The monetary policies of these currencies are fixed and abided by, and they can, and (in my opinion) probably will be a superior form of money and store of wealth compared to fiat and many non-tangible assets.

In my view, I think that her "vision" of the future is rather accurate, where both traditional finance and future fintech ideas will co-exist and neither will reign supreme and eliminate the other. We have propertyguru and online insurance portals, but for goodness sake, we still have property and insurance agents. Why? For the uneducated, the lazy or the people that are willing to pay a premium to not do it themselves, of course.

However, I do believe that before I die, virtual currencies will be the preferred currency for international trade and wealth saving. It is only natural for people to gravitate to the actually scarce and limited asset compared to the infinite one, if both offers extremely similar utility (which obviously, virtual currencies have not reached those levels of utility yet, but they are catching up, FAST).

I'm way past the "It's okay to speculate, just put in a small sum" stage of crypto investing.

I am unashamed to say that the majority (more than 50%) of my networth is in cryptos and I am happily keeping it that way.

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