Does the IMF have beef with Bitcoin? Jack Mallers gives his take

Strike CEO, Jack Mallers gave a presentation to the International Monetary Fund (IMF) regarding the Bitcoin Lightning Network and its potential to open up cross-border payments.

The actual presentation was made just before Christmas. But Wednesday saw Mallers describe the event, including the feedback he received, to CNN’s Julia Chatterley.

You’d be forgiven for thinking Bitcoin and the IMF don’t see eye to eye in recent times. While Mallers remains somewhat guarded on whether that’s the case, he did say the IMF was “entertained and excited” with his presentation.

But reading between the lines, there is more to this story than Mallers is willing to disclose at this time.

“The #IMF is very entertained & excited about a new era of cross-border payments.”@ln_strike CEO @jackmallers recaps his creative #bitcoin presentation to the @IMFNews.

Plus, his take on #Visa (bullies!) & legacy costs (nonsense!) on @firstmove Pt 2 👇 pic.twitter.com/5t7VJh3Bms

— Julia Chatterley (@jchatterleyCNN) January 19, 2022

Tortilla chips, raisins, and peanuts

In presenting the case for Bitcoin as a cross-border disruptor, Mallers highlighted the problems as a result of the legacy Money Transfer Operators that currently dominate this industry.

He points out that retail users are burdened by high cost, slow transfers, and limited coverage and accessibility. Fixing this, Mallers says the Bitcoin Lightning Network is suitable because it is inherently global, interoperable, and not tied to any one country.

“If we were to, from scratch, design the perfect solution, we would want a global money, we would want a money that doesn’t live in a closed-loop system, we would want a currency that isn’t regionalized and localized to a nation state or a country.”

During the presentation, Mallers diverges to a story involving selling his cross-border vision to an asset manager responsible for trillions of dollars.

Once at the asset manager’s home, Mallers struggled to express himself coherently. But not to be thwarted, he drew inspiration from some nearby tortilla chips and trail mix that were laid out.

“This U.S tortilla chip wants to send a raisin to the El Salvador tortilla chip. But you have all these tortilla chips in the middle, these are the required intermediaries to facilitate this money moving…”

He added that the tortilla chip intermediaries are inefficient because they have sunken costs, including SWIFT fees, brick and mortar expenses, and “custody their own raisins” to front funds to the next tortilla in the chain.

Whereas with the Bitcoin Lightning Network, a peanut can travel from the U.S chip to the El Salvador chip instantly and at no cost.

Is the IMF coming around to Bitcoin?

Recently, the IMF has come out in opposition to private cryptocurrencies. For example, in reference to Bitcoin as legal tender in El Salvador, the IMF labeled the move an inadvisable shortcut.

Last week, the organization raised financial risk concerns over the growing correlation between crypto and stocks.

When asked about the IMF’s presentation feedback, Mallers said there are things he cannot make public. Nonetheless, he did say they were “very entertained and excited about a new era of cross-border payments.”