Financial decisions carry ramifications
The International Monetary Fund (IMF) has recently released the seventh version of its Integrated Balance of Payments and International Investment Positions Manual, known as BPM7. This comprehensive manual, spanning over 1,000 pages and the result of years of work by hundreds of IMF statisticians, now includes cryptocurrencies like Bitcoin in its statistical framework.
Crypto-assets without corresponding liabilities, such as Bitcoin, Ether, Dogecoin, etc., are classified as "non-produced non-financial assets", category AN22. On the other hand, stablecoins, not including algorithmically managed ones, may be allowed as Reserve Assets in specific cases. Categories AF33 and AF34, included in the manual, accommodate "crypto-assets with corresponding liabilities used as payment means".
However, the IMF does not consider Bitcoin as a Reserve Asset. Similarly, El Salvador's Bitcoins held as reserves are not included in IMF-compatible statistics of currency reserves. This means that when evaluating loan conditions, central banks are not allowed to include Bitcoin in their statistics of currency reserves.
The IMF has a chapter on "Foreign Assets that do not Qualify as Reserve Assets", which includes digital gold. However, Bitcoin is not considered "digital gold" in BPM7. Securities in foreign currencies are allowed as Reserve Assets, but the classification of Exchange-Traded Funds (ETFs) as Reserve Assets remains uncertain.
It is important to note that the new IMF manual does not allow central banks to record crypto-assets without a corresponding claim used as a means of payment as reserve assets. Crypto transactions will now be part of IMF economic statistics, marking a significant step towards the integration of digital currencies into the global financial system.
Stablecoins, mainly included in categories AF33 and AF34, are differentiated from algorithmically created ones like DAI dollars. The latter are not currently included in the manual's Reserve Asset categories.
In conclusion, the IMF's BPM7 provides a comprehensive framework for the classification and treatment of cryptocurrencies within the global financial system. While Bitcoin is not considered a Reserve Asset, its inclusion in the manual marks a significant step towards the recognition and integration of cryptocurrencies in international finance.
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