Have You SEEN THIS?! IMF Report Cannot Be Ignored!!

Financial stability has been a Hot Topic Among institutions lately and not just Because of the pandemic supply chain Issues record inflation or the ongoing War in Ukraine the continued adoption of Cryptocurrency has made it another Important factor so much so that the IMF Recently dedicated an entire section of Its Financial stability report to crypto Related Tech Today I’m going to tell you a bit about The IMF breakdown what its recent report Says about cryptocurrency and what it Could mean for the crypto Market [Music] Before we talk about financial stability I need to talk about responsibility if You look for financial advice in this Video you will only find futility that’s Because education and entertainment are My only abilities please contact a Financial advisor if your portfolio has Been vexed by volatility If this is the first time we see each Other my name is guy and I am a crypto Lover that’s why I create some of the Highest quality crypto content you will Ever discover coins tokens news reviews Filled with facts and stats that will Make you Ponder if this sounds like your Bread and butter subscribe to the Channel and ping that notification Bell Down Yonder All right now that you know my endgame

Let’s see what the IMF has been saying If you’re unfamiliar with the IMF here’s What you need to know The international monetary fund or IMF Was created as part of the Bretton Woods Agreement in 1944 when 44 countries came Together to agree that all their National currencies would be pegged to The US dollar at a fixed rate which Would in turn be backed by and Redeemable for gold at a fixed price The IMF was originally created to make Sure the exchange rates between the US Dollar and the other currencies remained Stable alongside other roles that are Nearly identical to those of the World Bank oh and FYI the World Bank was Created alongside the IMF at Bretton Woods After the Bretton Woods agreement ended In 1971 when the United States abandoned The gold standard the IMF turned its Focus to International Financial Stability In short the IMF makes sure by any means Necessary that any national economic Issues don’t become International Economic issues Following the 2008 financial crisis the IMF added gender equality income Inequality money laundering and climate Change to the list of things it concerns Itself with because why not Today the IMF consists of 189 countries

Which collectively decide what the IMF Does naturally a country’s voting power Is proportional to how much money it Pays to the IMF in the form of a Membership fee The IMF uses this money to finance its Operations as well as issue loans and The like because most of the imf’s money Is coming from Western countries the Imf’s mission is implicitly and Explicitly aligned with the economic Interests of said Western countries Namely the United States and the European Union case in point the imf’s Headquarters are in Washington DC right Across the street from the headquarters Of the World Bank total coincidence I’m Sure Like all other unaccountable International organizations the IMF has Its fair share of critics and the Primary point of criticism has been all The conditions that come with the loans The IMF issues to developing countries These conditions include things like Cutting health care and education Spending increasing raw material exports To Western countries allowing Western Corporations to set up shop in the Country and in the case of Argentina Discouraging the adoption of Cryptocurrency Now if that last point Didn’t Give It Away the IMF is anti-crypto I suppose

That’s not surprising given that its Purpose is ultimately to ensure the Current fiat-based Financial system Continues to operate without obstruction El Salvador’s adoption of Bitcoin as Legal tender in September last year put Cryptocurrency higher up on the imf’s List of priorities and it seems that the IMF has been coordinating with its Member countries to crack down on the Crypto industry to prevent it from Becoming a serious competitor to the Status quo This is one of the many things the IMF Discussed in its recent Financial Stability report which I’ll be breaking Down today the report is broken up into Three parts and most of it is honestly Quite technical pretty boring and not Really related to cryptocurrency as such I’ll just be summarizing what was said In the sections that explicitly Mentioned cryptocurrency as well as the Third part of the report which pertains To cryptocurrency note that you can find My breakdown of another recent IMF Report about the gradual decline of the US dollar using the link in the Description check that out later when You have time Now sit back and relax while I unpack The imf’s most recent crypto rhetoric The first section of the IMs report is Titled quote the financial stability

Implications of the war in Ukraine which Is pretty self-explanatory In the summary at the start of the Section the IMF notes that the economic Effects of Russia’s invasion of Ukraine Are likely to accelerate crypto adoption Particularly in developing countries I Would say this so-called cryptoization Is already in full force in both Ukraine And Russia because of the war with Regular citizens on both sides stacking Sets to protect their purchasing power And using stable coins for day-to-day Transactions as well they should The inflationary effects the war is Having on other countries appear to be Causing crypto adoption as well though It’s important to note that inflation Was already accelerating well before the War Began On page seven the IMF notes that crypto Could be used by Russia and other Countries to bypass sanctions but if you Watch my video about the second order Effects of the sanctions on Russia You’ll note that this is much easier Said than done and might even be Impossible to do If you need any proof blockchain Analytics firm chain analysis recently Released a report that confirms there is Not enough liquidity I.E money in the Crypto market for Russia to evade Sanctions and that’s just Russia I’ll

Leave a link to that report in the Description if you’re interested Now ironically enough the IMF cites Chain analysis as its source later in The report when it talks about how Decentralized exchanges privacy coins And privacy preserving Technologies Could be used to evade sanctions The IMF also notes that Bitcoin mining Could be another way that Rogue Countries have Aid sanctions which is Probably why the United States Treasury Department recently sanctioned a Russian Crypto Mining Company This begs the question of whether buying BTC that was previously or recently Mined by this Russian crypto Mining Company would result in sanctions or if Any BTC transactions processed by this Crypto Mining Company would constitute a Sanctions violation On page 33 the IMF admits that there’s a Possibility that central banks will Begin buying cryptocurrencies as part of Their foreign exchange diversification Strategies away from the US dollar Something which has accelerated since Western countries seized the overseas Assets of Russia’s Central Bank This is actually something I discussed At the end of my aforementioned video About the imf’s report on the decline of The US dollar and it’s crazy to see the IMF tacitly confirm my speculations

At the end of the first section of the IMs Financial stability report the Authors provide policy recommendations For all the issues they discussed Earlier when it comes to cryptocurrency The IMF recommends that countries take Steps to follow the recommendations of The financial action task force or fat F Which would effectively end the crypto Industry as we know it more about that In the description In addition the IMF recommends that Countries begin aggressively regulating Quote non-bank Financial intermediaries Which presumably includes things like D5 Protocols and various crypto apps Last but not least the IMF recommends That countries develop Central Bank Digital currencies to fight against Crypto adoption and you can find out why Cbdcs are the most terrifying technology In the world using the link in the Description Anyways the second section of the imf’s Report basically has to do with all the Government debt that’s been accumulated In response to the pandemic Although this section isn’t directly Related to crypto it’s important to Break down because it’s arguably the Biggest stability risk the financial System currently faces at least as far As the IMF is concerned As some of you will know government debt

Is typically sold to investors usually Foreign Banks and governments who want To safely earn an interest rate on their Idle capital Pension funds also tend to buy Government debt as they’re often Obligated to do so for financial Stability reasons During the pandemic however demand for Government debt from foreign sources and The domestic private sector wasn’t Enough to meet the supply the government Needed to spend and that left the buyers Of Last Resort commercial Banks and Central banks In the case of the United States the Federal Reserve bought almost 5 trillion Dollars of debt during the pandemic Mostly government debt and mortgage Related debt The graph is terrifying to put it mildly While all this government debt buying by Central banks isn’t always a problem in Developed countries it can be a very big Problem in developing countries this is Because the interest rate on a Government debt determines the interest Rate for other types of debt in its Country of origin it’s the risk-free Base rate that’s used to determine all Other interest rates of similar maturity So for example if the interest rate on a 30-year Government Bond is five percent Then you could expect to see a 30-year

Mortgage at five percent plus a Reasonable credit spread Now the interest rate on different Durations of government debt is Determined by supply and demand with low Demand resulting in higher interest Rates and high demand resulting in lower Interest rates so what happens when Foreign investors and domestic private Sector investors see that the central Bank and Commercial banks are the Primary purchases of a certain Government’s debt logically it leads to Even lower demand for that government Debt from these parties because they Sense that something isn’t quite right That leads to higher interest rates for That government’s debt normally this Wouldn’t be a problem because foreign Investors and domestic private sector Investors would eventually start buying That government’s debt again when Interest rates are high enough to wet Their profit appetite and the resulting Demand would bring interest rates back Down However because of all the debt that Governments have piled on in response to The pandemic allowing interest rates to Rise too much could cause them to Default on their existing debt and it Also makes it extremely difficult for Companies to borrow which has a negative Effect on economic growth

In developing countries the effects of This are even more severe because Interest rates are often High under Normal economic conditions this is Simply because there’s more risk Associated with buying the government Debt of a developing country The possibility that developing Countries could soon start to default on Their debts was the main topic of Discussion at a recent meeting and Subsequent debate between some of the Most powerful people in finance which Aired on CNBC last week The cast list for this included fed Chairman Jerome Powell European Central Bank president Christine Lagarde and IMF Managing director crystalina georgieva Who admitted while laughing that they Didn’t think about the consequences of Printing too much money in response to The pandemic ha ha ha In any case it looks like the IMF Spheres are slowly starting to come to Fruition as Sri Lanka appears to be on The brink of a default Even though the country only only has Around 50 billion dollars of foreign Debt this could lead to a domino effect Because lenders need that money to pay Back their own billions of debt now you Can learn more about just how bad the Debt bubble is by checking out my video About that using of course the link in

The description Anyhow the third section of the imf’s Report is the one that concerns Cryptocurrency which apparently falls Under the fintech umbrella I suppose That makes sense The authors Begin by acknowledging the Obvious and that’s that the pandemic has Accelerated the adoption of alternative Financial Technologies particularly Decentralized Finance protocols in Cryptocurrency The general theme is that these Alternative Financial Technologies are Fine so long as they don’t compete Directly with the banks in which case The authors consider them to be a risk To financial stability can’t say I’m Surprised The first case study the authors Examined in this regard is what they Call Neo Banks which the authors Define As branchless Banks whose Suite of Services are only accessible online or Via a mobile app The authors take issue with the fact That Neo Banks Target people who have a Hard time getting access to financial Services as far as the IMF is concerned These people carry inherent Financial Risks which makes Neo Banks risky by Extension And because neobanks are often nothing More than a more accessible front end

For the existing Financial system Neobanks therefore put the financial System itself at risk that is some Next Level sophistry I’m almost impressed The second case study the authors Examine is fintech companies that offer Mortgages in the United States now this Is news to me The authors take issue with the fact That fintech companies are growing Faster than Banks and explicitly state That quote fintechs directly compete With banks raising Financial stability Challenges The authors then finally pivot to Decentralized finance and they Eloquently explain that there are three Fundamental technologies that make D5 Possible these are blockchain to keep a Record of transactions smart contracts For secure complex transactions and Stable coins as a unit of account The authors acknowledge that defy has The potential to change the financial World but imply that the financial risks Outweigh the financial benefits After explaining the basics of defy the Authors reveal some interesting Statistics about it that I never knew About specifically that ninety percent Of the crypto being borrowed in D5 Protocols is some kind of stablecoin and 75 percent of the crypto being used as Collateral in D5 protocols is actually

Cryptos mostly BTC and eth What’s funny is that the authors state That borrowing a cryptocurrency is the Equivalent of shorting it without Realizing that this is exactly what’s Been done with Fiat denominated stable Coins when they’re borrowed against Volatile crypto collateral The authors also make an equally Interesting prediction and that’s that We will soon see defy expand to support Things like mortgages which seems Far-fetched Until you realize that many D5 Protocols are starting to incorporate Real-world assets as collateral The authors then talk about the risks of Liquidation and warn that D5 protocols Could become insolvent in the event of a Crypto market crash yet they fail to Provide an example and that’s because it Hasn’t happened at least not yet Now this is all thanks to the brilliant Design of these D5 protocols and an Example here is Ave which has been a Pioneer in this crypto Niche you can Learn more about that using the link in The description Now back to liquidations The authors drop another interesting Statistic about D5 and that’s that Liquidity provision on D5 platforms is Highly concentrated something I also Didn’t know To be exact half of the total deposits

On the average D5 protocol come from Fewer than a dozen wallets and the Authors rightfully point out that this Presents some serious risks Then again I suspect it’s not all that Different from centralized Finance with Massive asset managers like BlackRock That are connected to every single asset Market more about that in the Description Now the next element of defy that the Authors examine are cyber risks and this Subsection is surprisingly short The authors also failed to mention that Most of these so-called defy hacks are Really just massive Arbitrage trades Involving flash loans that typically Involve taking advantage of Oracle Inefficiencies sounds pretty smart huh Now Jokes Aside the author’s judge defy As being quote efficient but risky Specifying that defy has the highest Cost efficiency of any Financial Technology but is risky because D5 Protocols don’t require kyc to use and Because they don’t have access to the Money printers of central banks The relative lack of Regulation also Means that defy has a Competitive Edge Over other Financial Technologies and Institutions and it’s safe to say the IMF doesn’t like this one bit Now as far as regulatory recommendations Go the author’s call for stricter

Oversight of Neo Banks unironically Advocate for suppressing innovation in The fintech space to protect traditional Banks and demand scrutiny of stablecoin Issuers and crypto exchanges for their Alleged facilitation of D5 As for defy itself the authors straight Up suggest that authorities regulate This crypto Niche at the code level This is unprecedented and potentially Unconstitutional because code could Count as free speech under the First Amendment though this precedent has yet To be officially set The authors even go as far as suggesting That authorities become involved with The decentralized autonomous Organizations that govern these D5 Protocols to enforce regulations at the Blockchain level Admitting that all these regulatory Attempts could fail the authors conclude That one of the only other options would Be to prevent institutions from Interacting with D5 protocols altogether To quote slow the pace of growth so that D5’s adoption can be delayed while Regulators find a way to control it the Scariest part is that we could see Similar recommendations made for Proof-of-stake cryptocurrencies and you Can learn more about the pros and cons Of proof of stake and proof of work by Using the link in the description

And now for the big question what does All this mean for the crypto Market Well I think it’s pretty clear that the IMF isn’t all that concerned about Cryptocurrency so long as it doesn’t Interfere with the control the IMF and Its constituents have over the current Financial system From where I’m standing the IMF is an International version of the president’s Working group on financial markets in The United States which is essentially Tasked with making sure there’s never a Big crash in asset markets hence why It’s colloquially referred to as the Quote plunge Protection Team The fact that cryptocurrency is very Difficult to control doesn’t sit well With these fiat-focused institutions Because centralized control is the only Way that the current Financial system Can continue to exist and the need for This centralized control only increases As the system becomes more unstable Things like the pandemic supply chain Issues record inflation and the ongoing War in Ukraine are only adding to the Inherent instability of the financial System effectively shaking its Foundations while cryptocurrencies seep In to fill the cracks The bad news is that this means every Crypto technology that competes directly With the institutions that make up this

Crumbling Financial system is likely to Be a Target and even though Defy is First in the line of fire almost every Other crypto Niche stands behind it Something like the sec’s recent attempts To secretly change the definition of an Exchange to crack down on Defy is likely The first of many shots we’re going to See fired across the crypto bow from the United States and elsewhere The possibility of regulatory Crackdown On crypto code itself seems to be very Real as well Now the good news is that the IMF seems To have its hands full with more Immediate issues like governments Defaulting on their debts to quote the Imf’s managing director crystalina Georgieva we act like eight-year-olds Playing soccer everyone chasing the same Ball not paying attention to anything Else Cryptocurrency very much seems to be a Secondary concern and even though Defy Is on the imf’s to-do list it seems to Be far enough down that list that There’s time for the crypto industry to Find a solution to the incoming wave of Regulation the crypto Lobby is leading The fight on this front and I bet you’d Want to know more about that yup in the Description And that’s all for today’s video about The imf’s financial stability report if

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