I’ve been behind enemy lines reading everything the IMF has put out in the last 2 years.
Here are 10 pieces I found most relevant to Bitcoin.
“When you are thoroughly conversant with strategy, you will recognize the enemy’s intentions and thus have many opportunities to win.”👇 pic.twitter.com/ssDWlWpDGZ
— Sam Callahan (@samcallah) April 21, 2022
Let’s start with the IMF’s note titled “Blockchain Consensus Mechanisms: A Primer for Supervisors”
It might as well have been titled “Slander Proof of Work and Promote Proof of Stake”.
Here is an excerpt that sums it up in a nutshell👇 pic.twitter.com/JYAJsjnPnK
— Sam Callahan (@samcallah) April 21, 2022
You read that right…the IMF hints that virtual assets are being used to finance the proliferation of nuclear weapons.
Is there any evidence of the direct connection between VAs and weapons of mass destruction? 😂
I didn’t find any, but it sure does sound scary!
— Sam Callahan (@samcallah) April 21, 2022
Here, the IMF explores how to regulate virtual assets (VAs).
“VAs pose a significant threat to the integrity of the global financial system, money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction”
— Sam Callahan (@samcallah) April 21, 2022
They support FATF guidelines that VASPs do due diligence on customers & non-customers for transactions that are >$1,000.
They acknowledge the threshold is lower than traditional standards, but they argue that given the “particular risks of VAs”, stricter standards are justified.
— Sam Callahan (@samcallah) April 21, 2022
The IMF justifies stricter standards despite a recent report that found illicit activity consisted of 0.15% of crypto volume.
Also, don’t forget that AML policies have impacted only 0.05% of criminal finances.
This appears to be more about control rather than stopping crime. pic.twitter.com/XKbOOgIokt
— Sam Callahan (@samcallah) April 21, 2022
In this IMF report, I came across a new term, “cryptoization”, which refers to the risk of currency substitution occurring in emerging markets.
The IMF now has a term for when citizens opt out of their failing local currencies into digital assets…
— Sam Callahan (@samcallah) April 21, 2022
The IMF would prefer people not to have an exit at all, which is why they’re so excited about CBDCs.
This paper is an overview of 6 of the most advanced CBDC projects: China, Bahamas, Sweden, Canada, Uruguay, and the Eastern Caribbean Currency Union.
— Sam Callahan (@samcallah) April 21, 2022
None of the CBDC projects covered fully protect user privacy.
Some of them offer “quantitative restrictions” in that they offer anonymity for “lower tier” people to help them onboard if they don’t have IDs.
Central banks make the rules that determine who gets privacy and why. pic.twitter.com/O7GU3JOIDb
— Sam Callahan (@samcallah) April 21, 2022
This contains remarks from an IMF employee on how CBDC design choices can overcome the risks.
It displays the coercive nature of CBDCs and the power it would grant central banks. Notice the choice of words: “limit”, “restrain”, “impose”, and “capped”. pic.twitter.com/AOYgGWU6Q4
— Sam Callahan (@samcallah) April 21, 2022
On CBDC development, they write, “The IMF is collaborating with the BIS, the CPMI, and the FSB to establish relevant guidelines.”
That’s multiple non-governmental organizations designing the future global financial system with zero oversight.
Who voted for any of these people? pic.twitter.com/FrztxsP3UL
— Sam Callahan (@samcallah) April 21, 2022
10.)https://t.co/pXQcLnCxqI
Lastly, this interview in the IMF’s flagship magazine, proves the IMF is well aware of the real risks posed by CBDCs but is continuing with its plans anyway.Author Eswar Prasad candidly explained to an IMF employee the danger that exists with CBDCs👇 pic.twitter.com/yfOtFh6Fxc
— Sam Callahan (@samcallah) April 21, 2022
This one argues for a transition to electronic money to enforce negative interest rates.
They stress that a design requirement of CBDCs is they must be interest-bearing to allow for the implementation of negative interest rates.
How about…no.🖕
— Sam Callahan (@samcallah) April 21, 2022
From their own publications, one can see how the IMF attacks Bitcoin.
They scold PoW’s energy and criticize Bitcoin for facilitating illicit activity to justify regulatory overreach.
They push CBDCs and centralized PoS coins as viable alternatives cuz they’re easier to control.
— Sam Callahan (@samcallah) April 21, 2022
PoW vs PoS/CBDCs and BTC vs ESG
These are the battlegrounds.
The IMF wants to push PoW alternatives because they allow them to enforce their unsound policies with impunity. Negative interest rates, surveillance, inflation, etc.
The IMF can’t exert its power & control with PoW.
— Sam Callahan (@samcallah) April 21, 2022
Only Bitcoin is decentralized & censorship-resistant. Its energy use enables it to function as sound, incorruptible money.
Bitcoin consumes ~0.05% of global energy consumption.
So why all the fuss about Bitcoin?
It’s because Bitcoin can’t be controlled..and the IMF hates that. pic.twitter.com/a0imgJgP60
— Sam Callahan (@samcallah) April 21, 2022
Tesla gets kicked off S&P ESG List, where Exxon Mobile holds a top spot.
Bitcoin Must Be Accepted By World Bank, According To Charter
The World Bank has poured cold water on El Salvador’s adoption of bitcoin as legal tender, saying it cannot support the move due to “environmental and transparency” concerns.
But the developmental body may soon be forced to accept bitcoin payments from countries that have embraced the cryptocurrency.
Its founding document, the 1944 Articles of Agreement, outlines the procedures and principles by which the World Bank pledges to engage with sovereign governments. A central theme in the document is its commitment to accept payments from member states in local currencies.
Section 12 of Article V defines acceptable “forms of holdings of currency” as follows:
- The Bank shall accept from any member, in place of any part of the member’s currency, paid in to the Bank under Article II, Section 7 (i), or to meet amortization payments on loans made with such currency, and not needed by the Bank in its operations, notes or similar obligations issued by the Government of the member or the depository designated by such member, which shall be non-negotiable, non-interest-bearing and payable at their par value on demand by credit to the account of the Bank in the designated depository.
So, as well as allowing payments in “the member’s currency”, the charter allows central banks to pay with “notes or similar obligations” backed by their reserves.
These are effectively IOUs from governments. They can be backed by dollars. They can be backed by precious metals (the US Federal Reserve guaranteed its notes with gold until 1934, and with silver until the 1960s). Or they can be backed by bitcoin; perhaps, in El Salvador’s case, the $150m bitcoin fund being established by Banco de Desarrollo de El Salvador, the national development bank.
Things gets more awkward. Section 9 of Article II states that holdings paid into the bank by members should be continually re-valued (presumably against a “real” benchmark like USD). If the local currency has appreciated, it says, the World Bank should do the decent thing and hands the gains back:
- Whenever the par value of a member’s currency is increased, the Bank shall return to such member within a reasonable time an amount of that member’s currency equal to the increase in the value of the amount of such currency
Conversely, if the local currency has depreciated, the member gets margin called and has to “pay to the Bank within a reasonable time an additional amount of its own currency sufficient to maintain the value”. Or, put another way: when bitcoin starts tanking, the World Bank starts stacking. Nice.
All of this depends, of course, on whether or not the body will respect El Salvador’s sovereign right to choose its own currency.
That’s not a foregone conclusion. Reuters asked them about that yesterday and got a decidedly arsey response. “We are committed to helping El Salvador in numerous ways, including for currency transparency and regulatory processes,” a spokesperson waffled. “While the government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings.”
The World Bank, by the way, has invested more than $12bn in fossil fuel projects over the past six years, representing at least 6% of its total investment portfolio. It also accepts gold payments from members, despite gold mines emitting on average 0.8 tonnes of CO2 for every ounce of gold produced.
Still, they’re worried about bitcoin’s carbon footprint. So they’ll be happy to know that, by some estimates, 76% of bitcoin miners are already using renewable energy.
Oh yes, and every transaction ever made on the bitcoin network is recorded on an immutable digital ledger that is fully visible to all market participants. That makes it, by far, the most transparent monetary network that has ever existed. No funny business allowed.
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