• The International Monetary Fund (IMF) has released a board paper that provides guidance on how countries should draft appropriate policies in relation to cryptocurrencies.
• The nine-point agenda aims to help nations create a comprehensive, consistent, and coordinated policy response to the rising use of crypto assets.
• The IMF executive board expressed concerns about various aspects of these digital assets, including their financial stability, financial integrity, legal risks, consumer protection, and market integrity.
IMF Guidance on Crypto Regulations
The International Monetary Fund (IMF) has released a board paper that provides guidance on how countries should draft appropriate policies in relation to cryptocurrencies. According to a press release on Thursday, Feb. 23, the IMF says this policy advisory document addresses the inquiries of IMF member states on the benefits and risks of cryptocurrencies while including macro-financial considerations such as the effects of these digital assets adoptions on monetary and fiscal policies.
Through this policy advisory document, the global lender of last resort lays out a nine-point agenda that they claim will help all nations create a „comprehensive, consistent, and coordinated policy response“ to the rising use of crypto assets.
IMF Executive Board Approval
Deliberating on the board paper, the IMF executive board noted the timeliness and importance of this document to its member states. Considering various factors such as the growing adoption of cryptocurrency, its extraterritorial nature and that of its developers, and its increasing integrations with the global financial system; they unanimously agreed on the need for a comprehensive, consistent, and coordinated regulatory framework.
Risks Associated With Cryptocurrencies
The IMF executive board also commented on the risks that crypto-assets present to world economies; including their potential to sabotage effectiveness of a monetary policy; bypass capital flow management systems; and aggravate fiscal risks. They also expressed concerns about various aspects of these digital assets; including their financial stability; financial integrity; legal risks; consumer protection; and market integrity.
Overall; they stated their support for the board paper and all it entails as it aims at helping nations come up with comprehensive regulations related to cryptocurrencies without compromising their economic goals or international standards