Brazil’s Central recently announced that it will classify sold or purchased cryptocurrency according to International Monetary Fund (IMF) policies. The decision was revealed on August 26.
Due to the new categorizations under IMF guidelines, traded digital currencies will be considered as non-financial commodities and will thus be accounted as products on the balance sheet of the central bank.
Similar to a conventional bank’s balance sheet, a central bank’s balance page also sums up its financial position and is comprised of assets, liabilities, and equity.
Because selling and buying crypto entails delivering on foreign exchange agreements, the central bank looks at purchasing and selling cryptocurrency assets in their import and export data. And as Brazil is an importer of digital assets, this has reportedly added to the reduction of trade surplus on its balance sheet.
Experts say that the decision to classify crypto as good is important. Recognizing these digital coins as property would allegedly allow them to be utilized as a payment mechanism.
The Central Bank of Brazil pointed out that these categorizations were endorsed by the IMF’s Balance of Payments Statistics Committee. Said department acts in an advisory capacity but concentrates on external division statistics models.
Gita Gopinath on the Topic
The IMF has also called for increased scrutiny on the Libra issue. The IMF’s chief economist Gita Gopinath recently added her voice in advising regulators to be more circumspect in observing and acting against Libra, Facebook’s proposed stablecoin. Gopinath particularly asked global regulators to take immediate action.
The economist mentioned several concerns regarding Facebook’s newest endeavor. She said that the crypto could lead to backdoor “dollarization” and emphasized the importance of having checks and balances.