IMF advises on how crypto should be regulated, citing “urgent need for cross-border collaboration” – Bitcoin Regulation News

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The International Monetary Fund (IMF) presented some recommendations on how cryptocurrency should be regulated, noting that there is an urgent need for cross-border collaboration and cooperation in cryptocurrency regulation.

IMF Provides Recommendations on Crypto Regulation

The International Monetary Fund published a blog post on the regulation of cryptocurrencies on Thursday. The article titled “Global Crypto Regulation Must Be Comprehensive, Consistent, and Coordinated” is authored by Tobias Adrian, Dong He, and Aditya Narain of the IMF’s Monetary and Capital Markets Department.

Noting that “crypto assets and associated products and services have grown rapidly in recent years” and that their “interconnections with the regulated financial system are increasing”, the authors acknowledged:

Crypto assets potentially change the international monetary and financial system in profound ways.

“Policymakers find it difficult to monitor the risks of this evolving industry, in which many activities are unregulated,” they explained, adding, “In fact, we believe these financial stability risks may soon become systemic. in some countries. “

IMF suggests how crypto should be regulated

The IMF note then explains how cryptocurrency should be regulated. “The global regulatory framework should provide a level playing field across the spectrum of business and risk,” the authors argued and then listed three elements that should be included.

First, crypto service providers – including those that offer the storage, transfer, settlement, and custody of reserves and assets – “should be licensed or licensed,” the authors wrote. “The licensing and authorization criteria must be clearly defined, the responsible authorities clearly designated and the coordination mechanisms between them well defined. “

Second, “the requirements must be tailored to the main use cases of crypto assets and stablecoins,” they added, noting that regulators “must coordinate to address the various risks arising from different and changing uses.” , including central banks and securities regulators.

Finally, the IMF publication notes that “the authorities should provide clear requirements to regulated financial institutions regarding their exposure and engagement with crypto.”

The authors further cautioned that “in emerging markets and developing economies, the advent of crypto can accelerate what we have called” crypto “- where these assets replace national currency and bypass foreign exchange restrictions and restrictions. capital account management measures. ” They concluded:

There is an urgent need for cross-border collaboration and cooperation to address technological, legal, regulatory and supervisory challenges.

What do you think of the IMF’s suggestion regarding the regulation of crypto? Let us know in the comments section below.

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