IMF urges crypto regulation but warns against outright ban
IMF calls for crypto regulation rather than outright ban, stressing importance of finding a balanced approach to address challenges
The International Monetary Fund (IMF) reiterated its call for the regulation of cryptocurrencies in certain countries, but stressed that an outright ban may not be the best strategy.
In a June 22 report on Latin America and the Caribbean, the IMF highlighted different approaches taken by local governments to address the adoption of cryptocurrencies and central bank digital currencies (CBDCs).
In El Salvador, Bitcoin (BTC) has been accepted as legal tender since September 2021, while the Bahamas was the first country to launch its own CBDC, the Sand Dollar, in October 2020.
The agency floated the idea of a “new category” of cross-border payment platform with a single registry. According to the report, Brazil, Argentina, Colombia and Ecuador, whose governments are in the process of regulating cryptocurrencies, are among the countries with the highest rates of adoption of digital assets in an effort to help the unbanked, streamline payments and reduce costs, among other benefits.
The IMF stated: “If designed well, CBDCs can strengthen the usability, resilience, and efficiency of payment systems, and promote financial inclusion in Latin America and the Caribbean. Although some countries have chosen to ban cryptocurrencies entirely due to Due to its risks, this approach may not be effective in the long term.Instead, the region should focus on addressing the drivers of demand for cryptocurrencies, such as the unmet needs of citizens for digital payments, and improving transparency through registration of crypto asset transactions in national statistics”.
It is important to mention that the agency repeatedly expressed its opposition to countries adopting cryptocurrencies as legal tender. On June 19, Tobias Adrian, director of the IMF’s Monetary and Capital Markets Department, proposed a payment system that uses a single ledger to record CBDC transactions. This idea received strong criticism from many players in the cryptocurrency space.
K. Tovar
Source: Cointelegraph
(Reference image source: Kanchanara, Unsplash)
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