IMF Working Paper: Bitcoin is Crucial for Wealth Preservation in Financial Turmoil
A recent working paper from the International Monetary Fund (IMF) suggests that Bitcoin is crucial for individuals in high-inflation countries like Argentina and Venezuela, as it allows them to preserve wealth during periods of financial instability and access global markets. The paper also notes that people turn to Bitcoin to escape local economic and currency instability, evade capital controls, and avoid strict domestic financial regulation. Particularly in emerging markets such as Argentina and Venezuela, Bitcoin has significant liquidity. The countries with the highest inflow of Bitcoin are Seychelles, Venezuela, Moldova, Nigeria, and Central African Republic. Residents have started turning to Bitcoin for cross-border capital flows making it more than just a speculative investment. Countries like Seychelles and Moldova attract cryptocurrency exchanges due to their low tax rates and relaxed regulations but these nations also see people considering bitcoin as a safe asset due to currency depreciation and economic instability.
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