- The IMF has endorsed Stablecoins in its latest report, calling them US Treasury-backed digital assets.
- A previous report from it, published in Dec 2024, called stablecoins risky and asked countries to desist from adopting them.
- It has also been critical of Bitcoin and other cryptocurrencies.
- Interestingly, all stablecoin issuers have large Bitcoin reserves on their balance sheets.
IMF Takes U-Turn on Stablecoins, Now Endorses Them
Once highly critical of cryptocurrencies and stablecoins, the International Monetary Fund has seen a complete reversal in its monetary policy. According to the latest IMF report released a few hours ago, stablecoins are now considered mainstream financial assets backed by the US Dollar or US Treasuries.
The report highlights their rapid integration as world finance increasingly depends on them for cross-border transfers. The report features two major stablecoins, USDT and USDC, and shows their asset composition. It is noteworthy that the USDT launched a new stablecoin in the US (USAT) due to asset quality concerns among regulators and users.
Read More: Tether Launches USAT, Despite 100% Reserve Claims on USDT, Accelerates Gold Purchases
Interestingly, just a year ago, the same IMF highlighted how stablecoins were a risk to global finance, calling them inherently risky assets. The report below featured an article from Yahoo Finance that criticized stablecoins for cross-border payments.
There has been no major change in the structure or issuance of stablecoins over the last 14 months, i.e., since the release of the previous IMF report.
IMF Still Critical of Bitcoin
However, despite major developments and Bitcoin’s rise as a mainstream asset, the international fund remains critical of Bitcoin specifically and other cryptocurrencies in general.
Just last year, it asked El Salvador to hold off all Bitcoin purchases and revoke Bitcoin’s status as an accepted currency. It had paused a $1.4 billion loan till the changes were made. The funds were meant to run the government for the next decade and transform the country’s economy.
A similar story occurred with Argentina, where the IMF asked the country not to be lenient with its cryptocurrency laws in exchange for a similar bailout package.
All Stablecoin Issuers Have Bitcoin Reserves
Almost all major stablecoin issuers hold substantial amounts of Bitcoin in their treasuries.
USDT issuer Tether holds the largest reserves with 96,184 Bitcoins; USDC issuer Circle holds 73 Bitcoins; the Trump Family, which issues USD1, holds 9,539 Bitcoins; and DAI holds 369 Wrapped Bitcoins in its reserves.
Will the IMF Accept Bitcoin as a Mainstream Asset?
Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.
