Central Bank Of Brazil To Classify Cryptos As Per IMF Guidelines

Purchase or sale of cryptocurrencies will be dealt by the Central Bank of Brazil in accordance with International Monetary Fund (IMF) suggestions.

As per IMF standards, Brazil’s central bank has decided to classify cryptos as non-financial products and will be accounted as non-financial products. This implies that cryptos will be considered as goods on the balance sheet of the central bank.

Similar to a commercial bank’s balance sheet, central bank will also have a balance sheet that will reflect its financial strength by listing out assets and liabilities.

As buying and selling cryptos involve foreign exchange dealings, the central bank is including crypto transactions in their import and export statistics.

On this basis, as Brazil is a net importer of cryptocurrencies, the central bank resorted to slashing the trade surplus on its balance sheet.

The classification of cryptos is basically perceived as a good decision. That would pave way for adoption and use as a mode of payment. The central bank has pointed out that such classifications were suggested by the Balance of Payments Statistics Committee, an advisory committee to the IMF Statistics Department, which concentrates on ‘external sector statistics methodology.’

Gita Gopinath, IMF chief economist, has asked regulators to be watchful and take measures against cryptocurrency Libra. Ms.Gopinath, particularly, asked regulators across the world to act without any delay.

Ms. Gopinath also pointed out some important worries about Libra:

“If you look particularly at countries that are not reserve currency countries, would this lead to backdoor dollarization? […] All of these questions (and) whether there will be enough checks and balances in place to prevent money laundering … are very important.”