IMF Cautions Against Cash and Fiat Savings in Light of Negative Interest Rates Proposals

It seems that it is a good time to be a crypto enthusiast. The International Monetary Fund (IMF) has recently decided to “declare war” on cash after it has proposed negative interest rates. If you want to preserve your wealth, it seems like it is the time to invest in cryptos.

According to Weiss Ratings, the IMF’s proposals of implementing negative interest rates are basically a war on fiat currency. If they succeed to do it, people’s fiat investments could see their interest rates going to zero.

This is why the company advised people to own a percentage of their savings in crypto, something that could help them a lot in the future if using fiat remains no longer a safe option like it is in some countries like Venezuela right now.

The main idea behind negative interest rates is to reduce interest rates that central banks determine, which could boost the economic development of some countries. This way, people would end up losing money due to inflation.

Governments would print more money to lend it and boost the demand, but this would make the inflation be higher when interest rates are low.

According to the IMF, a way to actually make this concept work would be to do away with fiat currency, however, we all know that the society is still pretty much based in cash. This simply would not change overnight and people would be affected if they were not able to invest in cryptos at the right time.

The IMF Proposal

The idea is for the central banks of the countries to split the money into two categories: fiat cash and digital currencies (also known as e-money). This way, digital coins would be issued via electronic ways and they would use the policies of interest rates. Paper cash, however, would have an exchange rate against this new digital money.

These Central Bank Issued Digital Currencies (CBDCs) would be vital for this new system and they would be very different from cryptos because they would be centralized and work like regular fiat. No country has started to do it so far, but there are reports that Sweden is interested in creating e-krona, a CBDC.

It seems like a very dangerous move that can backfire quite easily. Fortunately, today you have the option of using Bitcoin. BTC has the goal of giving money to the people in order to avoid governments making a mistake as they did in 2008, so this is your last line of defense.

If the plan from the IMF is actually accepted and people start struggling with inflation and negative rate charges, using cryptos is a great idea.

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