Finance Minister Colm Imbert said the government will not support cryptocurrencies, amid questions from the opposition about altcoin business models in the Senate on Tuesday. Citing an assessment from the International Monetary Fund (IMF) that said Trinidad and Tobago lacks a regulatory framework for cryptocurrencies. may be limiting the country's ability to develop alternative currency business models, opposition senator Damian Lyder asked what policy measures, if any, are being taken to address this issue. Describing the question as "staggering", Imbert said the IMF had issued several warnings. in a report earlier this year that the adoption of unbacked cryptoassets like bitcoin would have serious implications for macrofinancial stability. “They went on to explain why: that the adoption of cryptoassets could threaten the effectiveness of transmission and the sovereignty of monetary policy.
"Cryptoassets without credible backing pose risks to financial stability due to volatile prices, and when declaring a cryptoasset legal tender can create fiscal risks, this will cause risks to public finances.
"In terms of external stability, the entire financial monetary system may be at risk from the adoption of cryptocurrencies. In terms of capital flow stability, cryptoassets generate larger gross foreign capital positions and more volatile capital flows," he said. In terms of the structure of financial systems, cryptoassets with an open architecture are extremely risky, because anyone can contribute to these cryptoassets. They are prone to fraud and market integrity risks, and could destabilize the entire international banking sector.
"Cryptocurrency is also the currency used by drug traffickers, money launderers and people operating on the dark web and therefore I found this question surprising." Highlighting what he called failures in the cryptocurrency sector, Imbert cited a May 2022 Terra US dollar collapse that cost investors $45 billion. He also said that in June of that year, a cryptocurrency company, Three Arrows Capital, was forced into liquidation, causing a $3 billion loss to investors. He said FTX trading collapsed in November 2022, costing investors up to $50 billion.
Imbert cited several other cryptocurrency crashes that occurred up to this month, costing investors billions of US dollars in each case. “We have a situation where everyone knows that cryptocurrencies are dangerous. The world knows that cryptocurrencies are the currency of choice for criminals, and everyone knows that cryptoassets are not backed by anything.
“Why then, as Finance Minister, would you ask me if I might want to develop alternative currency business models?” "The answer is that we are not doing that. We are not involved in cryptocurrencies.
"It is dangerous and, as custodians of the treasury and the public purse, we are not putting the public's assets at risk." Given this position, Lyder asked if Imbert intended to present legislation to ban cryptocurrencies.
To this, Imbert responded that it is not considered legal tender in TT.
