On the sidelines of the G-20 finance ministers meeting in India, the IMF Managing Director Kristalina Georgieva noted, “We are very much in favor of regulating the world of digital money”. She says the IMF favors regulation of the crypto industry than an outright ban.
These sentiments were echoed by the US Treasury Secretary Janet Yellen, saying "We haven't suggested outright banning of crypto activities, but it is critical to put in place a strong regulatory framework".
An IMF Policy Paper circulated on February 23, details discussions by the IMF Executive Board on the elements of effective policies for crypto assets. They discussed a board paper on ‘Elements of Effective Policies for Crypto Assets’, designed to provide key elements of an appropriate policy response to crypto assets to its member countries.
The Board proposed a nine-point comprehensive framework on how the countries can structure appropriate policy responses. And this includes establishing legal certainty around crypto assets and addressing potential legal risks.
But an outright crypto ban isn’t off the table either
Global monetary stability remains firmly at the core of the IMF mandate regarding crypto regulation. IMF directs that no country should “… grant crypto assets official currency or legal tender status”.
And in the interview with Bloomberg, Kristalina Georgieva cautioned that “…if the regulation is slow to come and crypto assets become a higher risk for consumers and potentially for financial stability,” the option of banning cryptocurrencies “should not be taken off the table”.
Written by
Samwel
Samwel is a seasoned financial analyst with over 5 years of experience covering the global stock market, Forex, and crypto market.
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