Mar 14, 2024 at 03:46Andorra, a landlocked country nestled between France and Spain, received technical assistance from the International Monetary Fund (IMF) to bolster its ability to monitor Bitcoin transactions, among other financial matters.
In September 2023, the IMF conducted a technical assistance (TA) mission in Andorra with the aim of enhancing the country’s balance of payments statistics, which involve recording economic transactions between residents and non-residents.
As part of the 56 topics Andorra sought assistance on, the country highlighted its need to effectively record cryptocurrency transactions, particularly those involving Bitcoin. In response, the IMF provided guidance on the current and upcoming international standards for recording Bitcoin-type crypto assets.
The Andorran Financial Authority (AFA) informed the IMF that banks in Andorra are required to obtain prior approval for recording Bitcoin and other crypto asset transactions. However, no banks have yet sought such approval.
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In its recommendations, the IMF suggested that the AFA oversee the monitoring of crypto asset transactions and positions until September 2024, with a medium priority. This data will aid Andorra in compiling its macroeconomic statistics.
The IMF’s guidance on digital currencies extends beyond Andorra, as it recently highlighted the potential benefits of digital currencies for Pacific Island countries (PICs). However, it cautioned against the use of unbacked cryptocurrencies as national currency and urged a regional approach to digital money to address scalability and economic volatility concerns.
While acknowledging the potential of central bank digital currencies (CBDCs), the IMF advised caution and deliberation, suggesting that island nations hold off on immediate plans to introduce CBDCs due to readiness concerns.
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