Crypto Regulations Should Be Comprehensive, Consistent, and Coordinated, Says IMF

Recently, the International Monetary Fund (IMF), published recommendations about how to regulate cryptocurrency around the globe.

The IMF recently acknowledged that crypto assets are quickly revolutionizing the global financial system in a blog post. But, policymakers are still struggling to manage the risks associated the market.

Regulators must act quickly

The financial institution noted that crypto’s rapid growth has allowed it to link with regulated economic systems, while remaining unregulated.

These interlinkages could pose serious risk if global financial regulators don’t act quickly to reduce the risks and harness the incredible power of crypto.

“Policymakers have difficulty monitoring risks from this rapidly changing sector, where many activities are not regulated. The report states that we believe these financial stability risks could soon be systemic in certain countries.

The IMF called on a “comprehensive and consistent” approach to crypto regulation. It stressed that uncoordinated regulatory measures could “facilitate potentially unstable capital flows” as most crypto firms are located across borders.

Suggestion from the IMF

The IMF outlined three requirements for regulators to effectively regulate crypto worldwide.

First, all crypto service providers who provide critical functions such as storage, settlement, transfer, custody, and settlement of digital assets should be licensed. It is also important to clearly state the criteria for licensing, and identify the appropriate bodies.

The requirements must also be appropriate for the principal use cases of crypto assets. Securities regulators should monitor investment products because they should follow the same requirements as securities brokers. Payment products should follow the same requirements as banks and should therefore be regulated by central banks.

The third is that the governments of various countries should require regulated financial institutions to disclose clear and complete details about their crypto exposures and engagements.

The IMF warned that cryptocurrency use is increasing in many developing countries. It stated:

“Some emerging markets and developing countries face greater immediate and acute risk of currency substitution via crypto assets, the so called cryptoization. Cryptoization will require that capital flow management strategies be refined.

The IMF warned that crypto-based national currencies are very risky in July, just after El Salvador adopted Bitcoin.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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