The International Monetary Fund would prefer to differentiate and regulate crypto assets rather than impose an outright ban, although the nuclear option will remain on the table for now.
Kristalina Georgieva, managing director of the IMF, explained in the framework of the meeting of finance ministers of the G20 in Bengaluru (India) how the financial organization of the United Nations sees digital assets and what you would like to see in terms of regulation.
“We are very much in favor of regulating the world of digital money”, and this is one of our main prioritieshe declared.
During an interview with Bloomberg published on Feb. 27, he responded to a question about his recent comments about a possible outright ban on cryptocurrencies. He said there was still a lot of confusion surrounding the classification of digital money.
“Our first goal is to differentiate between central bank digital currencies that are backed by the state and publicly issued crypto assets and stablecoins.”
Fully backed stablecoins create “reasonably good space for the economy,” but unbacked crypto assets are speculative, high risk and not money, he added.
“There has to be more regulation,” IMF Managing Director Kristalina Georgieva says https://t.co/TMq6eWWwwf
— Bloomberg Crypto (@crypto) February 25, 2023
“There has to be more regulation,” says IMF Managing Director Kristalina Georgieva
Citing a recent document recommending global regulatory standards, He stated that crypto assets cannot be legal tender because they are not backed.
However, he warned that The option to ban cryptocurrencies “should not be ruled out” if they start to pose a greater risk to financial stability.
Nevertheless, good regulation, predictability and consumer protection would be a better option, and a ban would not need to be consideredGeorgieva said.
When asked what the decision to ban cryptocurrencies could cause, he said that the inability to protect the world’s consumers from crypto assetsrapidly evolving, would be the main catalyst.
The International Monetary Fund, the Financial Stability Board and the Bank for International Settlements are jointly preparing the publication of guidelines on the regulatory framework for the second half of the year.
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