The executive board of the International Monetary Fund (IMF) has provided guidance for member countries to develop effective cryptographic policies. The board emphasized the need to develop comprehensive crypto regulations to “better mitigate the risks posed by crypto assets while also reaping the potential benefits of technological innovation.”
IMF Executive Board Provides Guidance on Crypto Regulation
The International Monetary Fund (IMF) announced on Thursday the outcome of a discussion held by the directors of its executive board on a document titled “Elements of Effective Policy for Crypto Assets.”
Noting that the document establishes a regulatory framework that “can help members develop a comprehensive, coherent and coordinated policy response” to crypto assets, the IMF emphasized:
By adopting the framework, policymakers can better mitigate the risks posed by crypto assets while also reaping the potential benefits of technological innovation associated with them.
The first element of the framework outlined by the IMF is to “safeguard sovereignty and monetary stability by strengthening monetary policy frameworks and not grant crypto assets official currency or legal tender status.”
Other elements include protecting against “excessive capital flow volatility”, adopting “unambiguous tax treatment of crypto assets” and applying “prudential, conduct and supervisory requirements for all crypto market players”. The framework also establishes “a joint monitoring framework between different agencies and national authorities” and “international collaboration agreements to improve supervision and compliance with crypto-asset regulations,” the IMF detailed.
The executive board directors “generally noted that while the purported potential benefits of crypto assets have not yet materialized, significant risks have emerged,” the IMF continued, adding:
In general, the directors agreed that crypto assets should not be given official currency or legal tender status to safeguard sovereignty and monetary stability.
In addition, “crypto assets have policy implications that are at the core of the Fund’s mandate,” particularly their widespread adoption “could undermine the effectiveness of monetary policy, circumvent capital flow management measures, and exacerbate risks.” prosecutors”, warned the directors.
The IMF further conveyed that the directors of its executive board “widely agreed on the need to develop and apply comprehensive regulations, including prudential and conduct regulation for crypto assets, and the effective implementation of FATF (Factory Action Group) standards.” International Finance)”. The Directors also stated that the IMF “should work closely together to support regulatory work under the leadership and guidance of standard-setting bodies.”
While some directors thought outright cryptocurrency bans should not be ruled out, the IMF noted:
Directors agreed that hard bans are not the best option, but that specific restrictions may apply, depending on national policy objectives and where authorities face capacity constraints.
Emphasizing the importance of promoting the principle of “same activity, same risk, same regulation”, the directors stressed that “strong coordination between authorities, both nationally and internationally, is essential for consistent implementation and avoiding regulatory arbitrage ”. They concluded that the IMF “could serve as a thought leader for further analytical work on rapidly evolving developments in crypto assets.”
What do you think about the IMF executive board’s guidance for developing crypto policies? Let us know in the comments section.
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