The International Monetary Fund (IMF) issued a press release on the 23rd, making a series of recommendations to member countries and calling for a “concerted response approach”, clearly showing a tough stance on the adoption of cryptocurrencies.
“Widespread adoption of encrypted assets could reduce the effectiveness of monetary policy, circumvent capital flow controls, and exacerbate fiscal risks,” the IMF said in a statement. The IMF also mentioned that the organization’s board of directors reviewed cryptocurrency policy earlier this month. discussed.
“Directors generally observed that, while the anticipated possible benefits of crypto-assets have not materialized, significant risks have emerged,” the IMF said, arguing that cryptocurrencies should not acquire the status of official or legal tender. While the directors agreed that “strict prohibition is not the best option,” “some directors felt that total prohibition should not be ruled out.”
Regarding concerns and doubts about cryptocurrencies, the IMF mentioned that encrypted assets may impact financial stability, financial integrity, legal risks, consumer protection, and market integrity. The organization also discussed a framework consisting of nine elements. Can assist member countries in developing a comprehensive, coherent and coordinated policy response.
These nine points include:
1. Maintain the sovereignty and stability of the currency by strengthening the monetary policy framework, and do not give encrypted assets official currency or legal tender status.
2. Prevent excessive fluctuations in capital flows and maintain the effectiveness of capital flow management measures.
3. Analyze and expose the financial risks of encrypted assets, and adopt a clear tax system for encrypted assets.
4. Establish legal clarity of encrypted assets and deal with legal risks.
5. Develop and enforce prudential, conduct and supervisory requirements for all crypto market participants.
6. Establish a joint oversight structure among different domestic agencies and government authorities.
7. Establish international cooperation arrangements to strengthen the supervision and enforcement of encrypted asset supervision.
8. Monitor the impact of encrypted assets on the stability of the international monetary system.
9. Strengthen global cooperation to develop digital infrastructure and alternatives for cross-border payments and finance.
By adopting the framework, policymakers can better mitigate the risks posed by crypto-assets, while also taking advantage of the potential benefits of technological innovations associated with them, the IMF said. The IMF also recommends that member countries should work to strengthen digital infrastructure and establish different options for cross-border payments and finance, thereby mitigating the risks posed by cryptocurrencies.
According to the IMF, directors generally agreed on the need to develop and apply comprehensive regulations, including prudential and conduct-based supervision of crypto-assets, as well as effective implementation of FATF standards on AML/CFT. They noted that the IMF should work closely together under the leadership and guidance of standard-setting bodies to support supervisory efforts. Against this backdrop, the Directors emphasized the importance of fully aligning the Framework with the initiatives and standards set by standard setters. The directors agreed that strict bans were not the best option, but that targeted restrictions could be applied, depending on domestic policy objectives and capacity constraints faced by authorities.
However, some directors felt that an outright ban should not be ruled out. The directors noted that regulation should take care not to stifle innovation, and that the public sector can leverage some of the underlying technologies of cryptoassets to achieve its public policy goals.
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