IMF to increase surveillance of virtual assets

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Citing its mandate to ensure the safety and soundness of the global financial system, the International Monetary Fund (IMF or the Fund) has indicated that it will significantly step up its efforts to monitor and engage with various actors in the asset space. virtual. The IMF has released a report detailing the various ways it should seek and provide advice related to the burgeoning digital economy.

Summarizing its objectives, the IMF said:

First, new forms of money must remain trustworthy. They must protect consumers, be safe and anchored in strong legal frameworks, and support financial integrity. Second, national economic and financial stability must be protected by carefully designed public-private partnerships, a smooth transition in the role of banks and fair competition. […] digital currency should be designed to support climate sustainability and effective fiscal policy. Third, the international monetary system (IMS) must remain stable and efficient. Digital currency must be designed, regulated and delivered in such a way that countries retain control over monetary policy, financial conditions, capital account opening and exchange rate regimes. Payments systems must become increasingly integrated, unfragmented, and must work for all countries to avoid a digital divide. Additionally, reserve currency setups and backstops should move smoothly.

Among the many mandates of the IMF regarding virtual assets is the development of (1) improved surveillance capacities and (2) a better understanding by IMF staff of the unique risks posed by non-traditional forms of currency.

As digital technology will have a major impact on future economic performance and shape the international monetary system[,] the IMF must be able to recognize potentially problematic patterns of digital monetary behavior, which may be indicative of unsustainable economic activity.

As digitized forms of money become the norm, the basic guiding principles of the IMF (risk analysis, surveillance and safety nets) must be applied to this new economy, so that any systemic risk to the global financial system is quickly identified. and attenuated.

The IMF is seeking a particular focus on central bank digital currencies (CBDCs), as a recent survey they conducted found that 100 countries were actively exploring the functionality of CBDCs. This means that the Fund is already likely to lag behind when it comes to assessing the relevant systemic risks that may emerge from CBDCs, and that industry and regulatory input can be of great value to help the Fund determine how best to accomplish its mission as applied to these unique, government-sponsored virtual assets.

The IMF concluded by asking Directors if they agreed that the role of the Fund should evolve given the rapid evolution of digitization.[.] It is clear from the anticipated macroeconomic impacts of currency digitization that the answer is yes.

The training of regulators and supranational organizations will be of the utmost importance, as the term money takes on a new meaning and digitization forever changes the way the global economic system works.

Ukraine to allow central bank to issue CBDC

On June 30, the Verkhovna Rada (the Ukrainian equivalent of Parliament / Congress) approved a law authorizing the National Bank of Ukraine to launch a CBDC. Ukraine has been a leader in the development and advocacy of CBDCs, having first built a CBDC model on the Stellar blockchain in 2018. The bill was enacted by President Volodymyr Zelensky and will enable development at the both CBDCs and non-government digital currency. private technology sector projects.

US Department of Justice investigates Tether for bank fraud

Following a settlement with the New York attorney general earlier this year, Tether now faces yet another legal hurdle in its quest to remain the industry’s leading stablecoin issuer. The main question is whether Tether or its representatives concealed from the banks that the transactions were related to crypto[.] The investigation has implications not only for the legal entities involved in issuing Tether, but also for the executives of those companies. This investigation may test the courage of Tethers’ stability, as growing speculation about the sustainability of the transmitter will continue to escalate.

New crypto taxes included in bipartisan U.S. infrastructure bill

A bill before the United States Congress would require that persons or legal entities who regularly transfer virtual assets:

Keep records of these transfers and file reports with the IRS, including reports detailing all digital asset transactions over $ 10,000.

If it were determined that a potential taxpayer is liable for unpaid taxes arising from information revealed in these reports, the IRS would be entitled to sue such person for the full amount owed.

Finland will sell its dirty bitcoin

The Finnish customs agency has asked cryptocurrency companies for proposals regarding its early sale of confiscated Bitcoins, mostly from drug-related transactions. This action will clean dirty rooms and allow their reintegration into the global digital economy. Wallets and transactions included in the sale should be reported by blockchain monitoring and analysis companies, as they may no longer be considered risky after being officially dispersed by a recognized government agency.

Tools like Elliptic’s Navigator and Lens allow you to identify risks associated with crypto transactions or wallets and are essential in separating really problematic coins from harmless (but previously troubling) coins.

Did you miss our update of the last few weeks? Catching up here: US puts stablecoins at the top of the political agenda

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