The International Monetary Fund (IMF) has put forward some suggestions on how to regulate cryptocurrencies, and pointed out that there is an urgent need for cross-border cooperation and cooperation in the supervision of cryptocurrencies.
IMF advises on encryption regulation
The International Monetary Fund published a blog post on the regulation of cryptocurrencies on Thursday. The post entitled “Global crypto regulation should be comprehensive, consistent and coordinated” was written by Tobias Adrian, Dong He, and Aditya Narain of the Monetary and Capital Markets Department of the International Monetary Fund.
The author pointed out that “encrypted assets and related products and services have grown rapidly in recent years” and that their “connections with the regulated financial system are increasing.” The author admits:
Encrypted assets have the potential to change the international monetary and financial system in profound ways.
They explained: “Policy makers work hard to monitor the risks in this evolving sector, many of which are not regulated,” and added: “In fact, we believe that these financial stability risks may soon become systemic in some countries. risk.”
IMF recommends how to regulate cryptocurrencies
The IMF’s post then discussed how cryptocurrencies should be regulated. “The global regulatory framework should provide a level playing field within the scope of activities and risks,” the author asserted and went on to list the three elements that should be included.
The authors write that, first of all, crypto service providers—including those that provide storage, transfer, settlement, and custody of reserves and assets—“should be licensed or authorized.” “Should clearly define the licensing and authorization standards, clearly designate the responsible departments, and clarify the coordination mechanism between them.”
Second, “requirements should be tailored to the main use cases of encrypted assets and stablecoins,” they added, noting that regulators “need to coordinate and resolve various risks arising from different uses and changing uses,” including central banks and securities. Regulatory Authority.
Finally, the International Monetary Fund’s post stated that “the authorities should make clear requirements for the exposure and participation of regulated financial institutions to cryptocurrencies.”
The author further warns that “in emerging markets and developing economies, the emergence of cryptocurrencies can accelerate what we callencryption‘-When these assets replace the national currency and circumvent foreign exchange restrictions and capital account management measures. They concluded:
There is an urgent need for cross-border collaboration and cooperation to meet technical, legal, regulatory, and regulatory challenges.
What do you think of the IMF’s recommendations on cryptocurrency regulation? Please let us know in the comments section below.
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