cypherdoc said:

The IMF could accumulate Bitcoins through its member countries by expanding the scope of Article IV, Section 5 of the Articles of Agreement to include digital currencies. This would enable the Fund to require all member nations to pay part of their subscription quota with bitcoins, giving the IMF a steady supply of bitcoins for their reserves. However, the rules can be interpreted loosely or strictly, and this may not be possible at all, he speculates.

Alternatively, the IMF can directly acquire bitcoins themselves, from exchanges and users. The problem is that “Article II, Section 2 explicitly states that membership to the IMF is only open to other countries,” Plassaras argues. Therefore, in order to obtain bitcoin directly, “Article II could be amended to include a new section, Section 3, which provides quasi-membership status for digital currencies.”

Since bitcoin would not need full IMF benefits or burdens of membership, such as the ability to borrow money from the IMF, the agency would “recognize Bitcoin as an ‘IMF-official’ digital currency.” Plassaras suggests that by this method, bitcoin will gain increased legitimacy from the IMF's recognition, while the IMF would benefit from having a way to purchase bitcoin reserves.



http://bravenewcoin.com/news/imf-unable-to-supply-the-currency-needed-to-counter-speculative-attack-using-bitcoin/ Based on Plassaras' interpretation, there are only two ways which the IMF could ever acquire bitcoin.The IMF could accumulate Bitcoins through its member countries by expanding the scope of Article IV, Section 5 of the Articles of Agreement to include digital currencies. This would enable the Fund to require all member nations to pay part of their subscription quota with bitcoins, giving the IMF a steady supply of bitcoins for their reserves. However, the rules can be interpreted loosely or strictly, and this may not be possible at all, he speculates.Alternatively, the IMF can directly acquire bitcoins themselves, from exchanges and users. The problem is that “Article II, Section 2 explicitly states that membership to the IMF is only open to other countries,” Plassaras argues. Therefore, in order to obtain bitcoin directly, “Article II could be amended to include a new section, Section 3, which provides quasi-membership status for digital currencies.”Since bitcoin would not need full IMF benefits or burdens of membership, such as the ability to borrow money from the IMF, the agency would “recognize Bitcoin as an ‘IMF-official’ digital currency.” Plassaras suggests that by this method, bitcoin will gain increased legitimacy from the IMF's recognition, while the IMF would benefit from having a way to purchase bitcoin reserves. Click to expand...

the only reason for organizations such as the IMF to acquire Bitcoin is to hold it as a reserve asset

Plassaras asserts that the IMF is ill-equipped to handle the widespread use of digital currencies in the foreign exchange market, and a theoretical speculative attack from bitcoin users.



A speculative attack in the foreign exchange market is the massive selling of a country's currency assets by both domestic and foreign investors.



If this happens, the nation's central bank would need to already possess bitcoin reserves in order to offset the attack, and if it does not have enough bitcoin, it would turn to the IMF for assistance, if it is a member.



However, the IMF does not have any bitcoin currently, and will find it challenging to obtain enough bitcoin for their reserves. Further, if there is a speculative attack by a bitcoin holder, the IMF's current rules do not allow the agency to acquire bitcoin. Click to expand...

If people start to sell fiat and buy bitcoins, then to counter this we need an unlimited quantity of bitcoins to sell into that market demand to offset it and maintain the current BTC/fiat price ratios.

If organizations such as the IMF ever started to acquire bitcoin, I think the effect would be much larger than most people realize.Modern central banking relies upon the ability of a central bank to create units of account for itself on demand. The ability to create units on demand enables a central bank to stop market forces from functioning during periods when demand for money outstrips supply (which is what happens during deflationary periods or when an economy takes too much debt and collapses). Central banks do this simply by increasing supply out of thin air and providing that new supply to the market. The increase in supply is done to an effect that rebalances supply and demand for money. However instead of letting the market rebalance supply and demand by rewarding savers, central banks rebalance supply and demand by rewarding selected groups.Given this, the IMF or FED acquiring bitcoin does not provide them the same functionality they have and expect today, for the simple reason that the IMF or FED can not create BTC units on demand. To have today's functionality, they need the ability to create new supply in proportion to market demand during downturns. However doing so: 1) Would quickly drain the IMF's or FED's supply of BTC and 2) The quantity require today to combat downturns outstrips any amount of supply they could acquire (example, the FED increased supply >400% of total supply since 2009, that is not possible in Bitcoin ).As a result,. The reason this would be more impactful than most realize is central banks acquire reserve assets to permanently hold them, not to sell them into downturns. So if the IMF ever started to acquire bitcoins, it would do so with the intention holding the coins to back its own currency units, and those bitcoins would in effect be removed from daily supply.I seriously doubt the IMF or FED are interested in acquiring bitcoins though. Sound money mechanics are diametrically opposite to the functionality they exploit today. I expect central banks would only start to acquire bitcoins after everyone else views bitcoins as more valuable than fiat. We're a ways away from that unfortunatelyEdit:To me these statements show the extent of the ideological rot in central banking today, expose a glaring misunderstanding of how markets work, and highlight my points above.Plassaras essentially said: "" This is absurd. He also calls market demand to sell fiat and buy bitcoin a "speculative attack".The number of things wrong with such a view is astounding .1) Plassaras does not seem to understand that it is impossible to acquire enough of a hard asset to counter market demand, as you sell the hard asset to support your fiat the market sees this and values your fiat less and less, furthering the "speculative attack".2) It is the HOLDING of a hard asset that provides value to fiat. By selling the hard asset to "support" your current spot price, you are LOWERING the value of the fiat you are trying to hold up..3) Plassaras also does not seem to understand that any amount of BTC held to counter market forces, first has to be purchased on the open market. This pre-purchasing would have to at least equal or exceed the counteractive selling they would later require. The pre-purchasing though would itself be the "speculative attack"4) The selling of fiat for bitcoin (or any hard asset) is not a "speculative attack" but normal market forces placing value on assets. You cannot control market valuation of assets. The fact that Plassaras, Bernake and Yellen think you can is shocking.I could go on but it is late