IMF chief economist says don’t ban crypto

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Gita Gopinath – chief economist at the International Monetary Fund – recently said that developing economies should refrain from banning crypto. Instead, she called the global regulation of the industry a “need of the moment.”

The Global Crypto Challenge

Gopinath described the regulatory challenges around crypto at an event hosted by the National Council for Applied Economic Research (NCAER) on Wednesday. She said global crypto policy is urgently needed to address the challenges that technology poses to emerging markets.

Moreover, she said banning them was simply impractical, given the global presence that exchanges have.

“The regulation of crypto assets and currencies is critical, especially for emerging and developing economies, as banning them may not work as crypto exchanges are located overseas, allowing an individual to trade them more. easily despite the ban, ”she said.

Last September, China announced a ban on all crypto exchanges in the country, after which exchanges such as Bitmart and Biki fled the country. Meanwhile, India is still debating an equivalent ban.

Gopinath emphasized developing a “comprehensive” policy around crypto, as cross-border transactions make regulations in a single country quite weak. They can be used to evade “exchange rate controls, capital controls and measures of capital flows,” she said.

Michael Saylor – CEO of MIcroStrategy, the world’s largest owner of Bitcoin – highlighted this exact property as extremely useful from a business perspective. Unlike real estate, Bitcoin can be transferred across borders at “the speed of light” to the most tax-efficient jurisdictions.

Christine Lagarde – President of the European Central Bank – has also pushed for global regulation of cryptocurrencies, to fight against its decentralized “money laundering” capabilities.

Prohibition regulations

Besides India and China, most other jurisdictions have ruled out banning cryptocurrencies, taking a regulatory approach instead. In fact, many U.S. officials see China’s ban as a great opportunity to welcome the industry, capitalizing on its innovation. These include Ted Cruz, Hester Peirce, and Pat Toomey, among others.

Singapore has also chosen not to ban. MAS director Ravi Menon believes crypto could “lead to very good results for the economy and society” and would prefer to develop a regulatory framework within which it would operate.

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