Tuesday, June 25, 2019

IMF and World Bank Launches Private Blockchain-based Cryptocurrency

A number of financial institutions are known to be pessimistic about Bitcoin and even blockchain technology. Nonetheless, the International Monetary Fund (IMF) and World Bank, two of the largest international financial institution have launched a quasi-cryptocurrency that is based on a private blockchain, according to a recent report by Financial Times.

IMF and World Bank Launch a Cryptocurrency and Private Blockchain

Per the report, the IMF and World Bank have launched a quasi-cryptocurrency called Learning coin, and a private blockchain which the digital currency will be based on. However, Learning coin will not have any monetary value and as such, it is not a real cryptocurrency like Bitcoin.

According to the IMF, Learning coin’s purpose is to enable them to understand the blockchain and its real-world application. The proposed digital currency will be used within the walls of the IMF and World Bank. Specifically, it will be used by staffs of both organizations to learn the basics of blockchain such as smart contract, and challenges faced by the cryptocurrency space.

Staffs to Earn Learning Coin After Reaching an Education Milestone

Furthermore, workers will earn Learning coin by reaching the set educational milestones. They can also exchange it for other rewards at a later time which will give them an insight on how cryptocurrencies are used in real-life. In the same vein, its app will serve as a hub to store informative content such as blogs, videos, presentations, and research.

IMF also said:

The development of crypto-assets and distributed ledger technology is evolving rapidly, as is the amount of information (both neutral and vested) surrounding it. This is forcing central banks, regulators and financial institutions to recognize a growing knowledge gap between the legislators, policymakers, economists and the technology.”

Financial Institutions’ Varying Opinion About Blockchain

While these are positive developments geared towards cryptocurrencies, it does come as a surprise given the opinion of financial institutions about blockchain. For instance, Aanchal Anand, a Land Administration Specialist in the World bank’s Global Land and Geospatial Unit said blockchain is a hype.

Catherine Bessant, a senior executive at Bank of America (BoA) in March also said she is privately bearish about blockchain.

According to Bessant:

I haven’t seen one [use case] that even scales beyond an individual or a small set of transactions…All of the big tech companies will come and say ‘blockchain, blockchain, blockchain.’ I say, ‘Show me the use case. You bring me the use case and I’ll try it’.

BTCNN on April 12 informed that the managing director of IMF, Christine Lagarde is requesting for better regulation of the cryptocurrency industry. In her opinion, cryptocurrency and any other thing that is using blockchain are shaking the system. “We don’t want innovation that would shake the system so much that we would lose the stability that is needed,” she added.

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