12/29/2021 - economy-and-finance

The IMF and tokenization: Tell me what you're talking about and I'll tell you what you're worried about

By horacio gustavo ammaturo

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On 6 October last, the International Monetary Fund issued its usual report, which evaluates the evolution of international markets and financial systems for the financing of emerging economies.

Potential risks are identified and the systemic problems are alerted to borrowers involved in these segments.

Interestingly, at this opportunity dedicated a complete section to cryptocurrencies.

If we follow the criterion of “the one you talk about and tell you what you care about,” we note that in the report there are particularly two cryptocurrencies and a kind of transactional instrument, the stable coins or coins.

Now, if we take note of how many times it is mentioned to each we see that only in seven opportunities is mentioned the Ethereum, in about thirty to Bitcoin and in more than one hundred to stable coins, which are digital asset emissions with an underlying support.

It is clear that the traditional global financial system no longer cares if someone has part of their savings in some of the cryptocurrencies that have offered high revenues for re-evaluation. It is enough to say that while those who invest in stocks or bonds measure their yields in percentages that fluctuate between 1% and 50% to the most risky and fortunate, who are in the miden crypto world in X their results, i.e. how many times have multiplied their investment. It is usual to meet with boys who only left secondary school who show their historical portfolios with multiplied contributions between 5 and 40 times. If, between 500% and 4000%. I look, this far note intends to recommend any type of investment, we only analyze intervals and past returns that do not allow to infer with certainty what will happen in the future.

What really worries is what is called “tokenization”.

Tokenizing is basically going through to digital format anything that might have value. Of a real good, or a service to provide, or even intangible rights. Blockchain technology offers generating records and managing your processing to anything, then as always the market, supply and demand, who puts the price.

However, the great danger that sees the old economy also does not eace in pure tokenization, but in the processing of digital assets.

History has shown us that while money circulates through the usual channels, which are the banking system, the correspondent networks for international transfers or credit card payment processors, any mismatch or error has as its responsibility for the tips of operations, never to bonds. It is a huge, oligopathic and compulsive business that no one can escape, at least so far.

The new technologies simplify each of the typical aspects of transactions:

  • Records, do not require complex file signatures or non-target certifications in each transaction.
  • Audit, in a permanent way, monitors each account and operation according to automated procedures and algorithms that check quantity and stacks
  • Scalability, as it is distributed and decentralized transactional systems, the investment needs in infrastructure and operations costs are minimal and do not depend on an amount or number of records.
  • Interoperability could be exchanged directly, without the need to pass money, author rights of a musician for a song recorded in Tokyo with a high-end car in La Florida, only taking as reference the relative values of each of the assets against a common value criterion.
It is the world of true that organized in a larger book of global, decentralized, safe and immediate registration, as reports travel at the speed of light, over the Internet.

Tokenization allows people to exchange goods, services and rights without having to pass through traditional currencies and obviously without using expensive mechanisms and processes of money transfers or changing currencies.

The first digital asset in Blockchain, Bitcoin today occupies a role in international finances as potential value reserve and common denominator of the rest of the emitted cryptocurrencies. That's not much. In fact, in the values of these days, above $60,000, its capitalization exceeds the M1 (primary monetary base) of countries such as India, Switzerland, Russia, New Zealand or Turkey, reaching almost half of the euro.

It is likely that in the coming times we will see how the regulators approve structured to accumulate cryptocurrencies. This week began operating the first investment fund in Bitcoin approved by Security Exchange Comision, with the main goal of maintaining at least one part of the transactions within the old operating channels, purses, banks and traditional processing systems.

For those who have understood the true value of these new tools, accumulators, as investment funds are part of the past. The path to decentralized finances does not admit concentrators, it would be like putting fresh hen to work a Tesla, a revolutionary electric vehicle, horses and carts are part of the past.

In my opinion, the Pandora box is already open. All we have to do is define whether we will be witnesses or protagonists in this new world.

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horacio gustavo ammaturo

horacio gustavo ammaturo

I am Gustavo Ammaturo. I have a degree in Economics. CEO and Director of infrastructure, energy and telecommunications companies. Founder and mentor of Fintech, DeFi and software development companies. Blockchain Product Designer.

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