IMF Advises How Crypto Should Be Regulated Citing ‘Urgent Need for Cross-Border Collaboration’ – Regulation Bitcoin News
The International Monetary Fund (IMF) has outlined some suggestions of how cryptocurrency needs to be regulated, noting that there’s an pressing want for cross-border collaboration and cooperation on cryptocurrency regulation.
IMF Provides Recommendations on Crypto Regulation
The International Monetary Fund printed a weblog publish on cryptocurrency regulation Thursday. The publish titled “Global Crypto Regulation Should be Comprehensive, Consistent, and Coordinated” is authored by Tobias Adrian, Dong He, and Aditya Narain from the IMF’s Monetary and Capital Markets Department.
Noting that “Crypto assets and associated products and services have grown rapidly in recent years” and their “interlinkages with the regulated financial system are rising,” the authors acknowledged:
Crypto belongings are doubtlessly altering the worldwide financial and monetary system in profound methods.
“Policymakers struggle to monitor risks from this evolving sector, in which many activities are unregulated,” they defined, including: “In fact, we think these financial stability risks could soon become systemic in some countries.”
IMF Suggests How Crypto Should Be Regulated
The IMF publish then discusses how cryptocurrency needs to be regulated. “The global regulatory framework should provide a level playing field along the activity and risk spectrum,” the authors asserted and proceeded to checklist three components that needs to be included.
Firstly, crypto service suppliers — together with these providing storage, switch, settlement, and custody of reserves and belongings — “should be licensed or authorized,” the authors wrote. “Licensing and authorization criteria should be clearly articulated, the responsible authorities clearly designated, and coordination mechanisms among them well defined.”
Secondly, “Requirements should be tailored to the main use cases of crypto assets and stablecoins,” they added, noting that regulators “need to coordinate to address the various risks arising from different and changing uses,” together with central banks and securities watchdogs.
Lastly, the IMF publish notes that “Authorities should provide clear requirements on regulated financial institutions concerning their exposure to and engagement with crypto.”
The authors additional warned that “In emerging markets and developing economies, the advent of crypto can accelerate what we have called ‘cryptoization‘—when these assets replace domestic currency, and circumvent exchange restrictions and capital account management measures.” They concluded:
There is an pressing want for cross-border collaboration and cooperation to handle the technological, authorized, regulatory, and supervisory challenges.
What do you consider the IMF’s suggestion for crypto regulation? Let us know within the feedback part under.
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