United States Treasury Secretary Janet Yellen highlighted the importance of putting in place a strong regulatory framework for cryptocurrencies during a G20 meeting on February 25.
Speaking to Reuters, Yellen saying that it was “critical to establish a strong regulatory framework”. He also noted that the United States is not suggesting an “absolute ban on crypto activities.”
Yellen’s comments follow previous ones by International Monetary Fund (IMF) Managing Director Kristalina Georgieva, stating that banning crypto should be an option:
“There has to be a very strong push for regulation…if regulation fails, if you’re slow to do so, then we shouldn’t lift the ban on those assets, because they can create a risk to financial stability.”
In addition, Georgieva pointed out to journalists that there is a need to differentiate central bank digital currencies (CBDCs) from stablecoins and cryptocurrencies, which are issued by private companies.
Related: What are CBDCs? A Beginner’s Guide to Central Bank Digital Currencies
At a previous conference, the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting under the Indian presidency addressed key financial stability and regulatory priorities, Cointelegraph reported.
The country’s Finance Minister Nirmala Sitharaman called for a coordinated global policy to address the macro-financial implications of crypto assets. Historically, Sitharaman has supported working with other jurisdictions in developing crypto regulations. For several years, the Indian government has debated whether to regulate or even ban cryptocurrencies.
On February 23, the IMF published an action plan on crypto assets, urging countries to abolish legal tender status for cryptocurrencies. The document, titled “Elements of Effective Policy for Crypto Assets,” outlined a framework of nine policy principles that address macrofinancial, legal and regulatory issues, and international coordination.
After a visit to El Salvador earlier this month, the IMF suggested that the country reconsider its plans to increase exposure to Bitcoin, citing the risk of cryptocurrencies to El Salvador’s fiscal sustainability and consumer protection, as well as for your integrity and financial stability.
