The island nations have common challenges and widely varying conditions. Just don’t use crypto, the IMF says.
Conditions in Pacific Island countries (PICs) create unique currency needs. Digital currencies are up to the task of meeting those needs, with the right design features, the International Monetary Fund (IMF) found in a new paper. At the same time, it warned against the use of unbacked cryptocurrencies as national currency.
PICs are tiny, diverse and geographically isolated markets with particular servicing and inclusion challenges, such as a high dependence on remittances and vulnerability to reduced correspondent bank services. They are also liable to run afoul of international Anti-Money Laundering efforts because of poor controls.
PICs differ by the development of local payment systems and whether they have their own fiat currency, among other things. Some PICs have no local financial infrastructure at all.
