The International Monetary Fund (IMF) issued a call to States not to grant cryptocurrencies the status of official currency or legal tender, emphasizing the need to establish stricter regulations.

In a recent report, the IMF highlighted the importance of having a strong legal foundation that addresses both private law and financial law aspects, in order to effectively regulate digital currencies.

The report cited flaws in the FTX cryptocurrency trading platform and the Terra Luna stablecoin, underscoring the urgency of establishing clear policies to protect investors and prevent potential abuse.

The IMF cautioned against investor optimism, noting that although bitcoin’s value has nearly doubled this year, risks of fraud and misconduct could negatively affect expected returns.

Some lawmakers took steps to protect users and ensure financial stability, but the IMF stresses that the broader implications of cryptocurrencies must be considered.

In particular, the report warns of the possibility of stablecoins eventually replacing official currencies, which could have a significant impact on countries’ monetary and fiscal policies, especially in emerging markets and developing economies. Therefore, the need for a comprehensive, coherent and coordinated policy approach in relation to cryptocurrencies is emphasized.

Given this scenario, the IMF suggests taking measures such as maintaining solid, reliable and credible national institutions, in order to strengthen the defense against the possible substitution of local currencies by cryptocurrencies.

K. Tovar

Source: El Universal

(Reference image source: James Baltz, Unsplash)

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