Crypto ban may not be effective in the long term IMF

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The International Monetary Fund (IMF) reiterated its calls for crypto regulation in some countries, but said an outright ban may not be the best approach.

In a June 22 report on Latin America and the Caribbean, the IMF highlighted various approaches taken by local governments to address the adoption of cryptocurrencies and central bank digital currencies, or CBDCs. Bitcoin (BTC) has been accepted as legal tender in El Salvador since September 2021, while the Bahamas was the first country to launch its own CBDC, the Sand Dollar, in October 2020.

The IMF said that Brazil, Argentina, Colombia and Ecuador, whose government regulation of crypto is underway, rank among the highest countries in the world for the adoption of digital assets in the world. aim to help the unbanked, send faster and cheaper payments, and more. Moreover, according to the fund, most of the central banks in the region have adopted or are planning to adopt digital currencies.

Related: IMF envisions a new class of cross-border payment platform with a single ledger

If designed well, CBDCs can enhance the user-friendliness, resilience and efficiency of payment systems and increase financial inclusion in [Latin America and the Caribbean], the IMF said. While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run. Instead, the region should focus on driving demand for crypto, including citizens’ unmet digital payment needs, and improving transparency, by recording crypto-asset transactions in national statistics.

The IMF has often made public statements against countries adopting cryptocurrencies as legal tender. On June 19, its Director of the Money and Capital Markets Department, Tobias Adrian, proposed a payment system that used a ledger to record CBDC transactions, an idea that received strong criticism from many players. of the crypto space.

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