The rapid growth of cryptoassets, ancillary products and services, and connections to a regulated financial system reinforces the need for global cryptocurrency regulation, represented, agreed upon and coordinated by regulators around the world.
IMF proposes 3 global rules for cryptocurrencies IMF believes global regulation of cryptocurrencies needs to be strengthened comprehensively
According to an article published by International on the website of an international financial institution in Washington:
“Politicians are struggling to control risks in this emerging sector, where many activities go unnoticed. In fact, we believe that these risks to financial stability may soon become systemically significant in some countries. ”
The analysis was conducted by Tobias Adrian, Financial Advisor and Director of the IMF’s Money and Capital Markets Department, Dong Hee, Deputy Director of the IMF’s Money and Capital Markets (MCM), and Aditya Narain, Deputy Director of the MCM Board of Directors. …
Three authors argue that uncoordinated regulations can contribute to potentially destabilizing capital flows around the world.
“While a market capitalization of nearly US $ 2.5 trillion demonstrates the substantial economic value of fundamental technological innovations such as blockchain, it may also reflect the chill in the current valuation environment. In fact, the first reaction to the Omicron variant of the COVID-19 virus involved a significant sale of cryptocurrencies. ”
The authors substantiate the need for global crypto regulation by the fact that “cross-industry and cross-border transfers of cryptocurrencies limit the effectiveness of country approaches.”
In addition, monitoring and enforcing compliance is becoming more complex as many crypto service providers operate overseas.
IMF Offers 3 Global Cryptocurrency Regulations
The proposed global regulatory framework should ensure a level playing field in terms of range of activities and risks, and should include the following three elements outlined in the contribution.
Cryptoasset service providers that perform essential functions must be licensed or authorized to carry out their activities;
The requirements must be tailored to the key use cases for cryptoassets and stablecoins, which means that investment services and products must have the same requirements as securities regulators for securities brokers and dealers;
The authorities should define clear requirements for regulated financial institutions with regard to their participation and participation in cryptocurrencies.
The document concludes that “there is an urgent need for cross-border cooperation and collaboration to address technological, legal, regulatory and supervisory challenges,” and adds that it’s mission “to provide an integrated, coherent and coordinated approach to cryptocurrency regulation. ”
“But if we start now, we can achieve the political goal of maintaining financial stability while taking advantage of fundamental technological innovation,” the authors say.