The Brazilian Central Bank will now follow the guidelines of the International Monetary Fund (IMF) in regards to the cryptocurrency trading.
In a recent ‘External Sector Statistics’ report published by the Banco Central Do Brasil which mentioned that the bank would follow the standard rules of IMF in cryptocurrency trading. In this crypto asset classification, the buying and selling of digital assets will be categorized as non-financial products, and the bank will make a balance sheet on account of the goods.
The balance sheet of the central bank is just like a traditional balance sheet that banks use to record the financial position that is drawn from assets, liabilities, and owner’s equity.
As the trading of cryptos gets done through the foreign exchange contracts, the central bank will provide the cryptocurrency trading in their import and export statistics. Brazil being a net importer of digital assets, has reduced the trade surplus on its balance sheet.
The IMF Recommendations
The IMF recommendations mentioned in the Treatment of crypto assets in macroeconomic statistics state that,
“Despite compilers’ increasing need for advice, there has been no formal guidance on the statistical treatment of crypto assets. Neither accounting nor regulatory standards provide clear guidance either. At present, Bitcoin-like crypto-assets do not meet the definition of a financial asset and hence currency, in macroeconomic statistics.”
The IMF recommendations guide the classification for the treatment of digital assets in macroeconomic statistics based on the current statistical standards and classifications. Bitcoin and other digital tokens without counterpart liabilities should be classified as produced nonfinancial assets in a distinct sub-category under valuables.
A Positive Development for Banco Central Do Brasil
This classification update of the cryptocurrencies is substantial progress for the central bank. As it will help the bank to recognize the digital assets as goods which will allow the users to use the crypto asset as a payment system.
As per the recommendations of the IMF mentioned above, the central bank from now on will continue to follow those instructions and make progress — and let the crypto ecosystem expand all across the state.
The central bank of Brazil has been doing R&D work on cryptocurrencies, knowing the importance of fast-growing blockchain technology and how cryptocurrencies can really boost their market. The central bank was ready to make further progress in crypto and engage such a relation with the new market that would improve the economic condition of the country.
The recent update on the classification of digital assets would open new gates for the financial industry of Brasil and brings more legitimacy as well as reliability to different businesses all over the country. And of course, the awareness of the central bank on the new revolutionary technology will turn out to be very helpful for the economic growth of Brazil in long-term progress.
Overall this is a good development for the crypto market as its significance keeps on growing. This crypto asset classification will also raise a sense of competition for other banks across the world. For staying competitive, more banks will adopt this crypto asset classification. Moreover, with the top financial institutions and governments recognizing the influence of crypto industry over different sectors of life, a massive wave of crypto adoption seems to be on its way.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.