IMF Unveils Crypto Plan, Advising Against Legal Tender Status

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…. The global lender recommends countries develop crypto policies that protect monetary sovereignty and stability.

The International Monetary Fund (IMF) has laid out a nine-point action plan for how countries should treat crypto assets, with the first point being a plea not to give cryptocurrencies such as bitcoin the status of course. legal.

The global lender of last resort said its board discussed a document, Elements of Effective Policies for Crypto Assets, which provides guidance to IMF member countries on key elements of an appropriate policy response to crypto. -assets.

Such efforts have become a priority for authorities, the fund said, after a number of crypto exchanges and assets collapsed over the past two years, adding that doing nothing was now untenable.

The main recommendation was to preserve monetary sovereignty and stability by strengthening monetary policy frameworks and not to grant crypto-assets official currency or legal tender status.

The IMF had hit El Salvador at the end of 2021 when the Central American country became the first to adopt Bitcoin as legal tender, a decision since copied by the Central African Republic.

Other advice on Thursday’s list, which comes as G20 policymakers meet in India, included protecting against excessive capital flows, adopting unambiguous rules and tax laws regarding crypto assets, and developing and enforcing oversight requirements for all crypto market participants.

Countries should also establish international agreements to strengthen supervision and enforce regulations, the IMF added, as well as put in place ways to monitor the effect of cryptos on the stability of the global monetary system.

Outlining its board’s assessment, the IMF said directors welcomed the proposals and agreed that widespread adoption of crypto assets could undermine the effectiveness of monetary policy, circumvent risk management measures capital flows and exacerbate fiscal risks.

They also generally agreed that crypto assets shouldn’t be granted official currency or legal tender status, and while strict asset bans weren’t the best option, a few admins thought they shouldn’t. be excluded.

SOURCE: REUTERS

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