IMF calls for stronger regulation of cryptocurrencies
The International Monetary Fund (IMF) stated the need to strengthen regulation of the cryptocurrency industry because its growth "creates a number of problems and risks to financial stability.
According to the IMF, many in the industry lack effective governance and risk management practices.
(The) pseudo-anonymity of crypto-assets also creates data gaps for regulators and can open unwanted doors to money laundering as well as terrorist financing. [...] In addition, the crypto-ecosystem falls under different legal regulations in different countries, making coordination difficult, the report said.
Foundation experts also drew attention to stabelcoins. They pointed out that the term "covers a very diverse group of crypto-assets and can be misleading," and the stablecoins themselves have the power to affect the financial system.
Threats to fiscal policy could also intensify given the potential for crypto-assets to evade taxes. [...] Increased demand for them could contribute to capital outflows affecting the currency market, experts added.
In their view, the exodus of miners from China to "emerging market and developing country" jurisdictions threatens additional problems for domestic energy consumption.
The IMF said that regulators should strengthen cooperation among themselves, practice a coordinated approach to cryptocurrency, pay attention to the implementation of existing global standards and the development of CBDC.
Earlier, the fund took a negative view of El Salvador's legalization of bitcoin. According to the organization, the decision could entail a number of risks and regulatory problems.
Recall that in July, the IMF declared its "key role" in the transition to digital money.