IMF directors say regulation of cryptocurrencies must be global, not national | News Dec 11
The IMF chiefs said crypto regulation needs to be done on a global scale as the sector’s rapid growth increases the need for global regulation. Regulation should be comprehensive and consistent, not national, so let’s find out in today’s crypto news.
The directors of the IMF published an article stating that regulation of cryptocurrencies must be global and coordinated by regulators around the world. According to the newspaper:
“Policymakers are struggling to monitor the risks in this emerging sector, where a lot of activity is going unchecked. In fact, we believe that these risks to financial stability could soon become systemically important in some countries. “
The analysis was written by Tobias Adrian, a financial advisor and director of the money and capital markets division, Dong He, the deputy director of the IMF’s money and capital markets division, and finally, the deputy head of the MCM Aditya division. The authors there argue that uncoordinated regulatory measures can even destabilize capital flows worldwide:
“While almost [USD] Its market capitalization of 2.5 trillion shows the substantial economic value of fundamental technological innovations like blockchain, it could also reflect the chill in the ongoing valuation environment. In fact, the first reactions to the Omicron. Variant [of the COVID-19 virus] including a significant crypto sell-off. ”
The authors justified the need for global crypto regulation with the fact that cross-industry and cross-border transfers of crypto currencies limit the effectiveness of the country approach. They also believe that monitoring and enforcement is much more difficult due to the large number of cross-border crypto service providers. A global regulatory framework can ensure a level playing field with a spectrum of activity and risk, including crypto-asset service providers that perform critical functions and license requirements or powers.
One of the other key factors is that requirements must be tailored to the primary use cases of crypto assets and stablecoins, which means that services and products must have similar requirements to how stockbroker’s services and products are enforced by securities regulators. Authorities should also clearly define all requirements for regulated financial institutions in terms of engagement and interaction with cryptocurrencies. The article notes that there is a strong need for cross-border collaboration and collaboration and adds that establishing a consistent and coordinated regulatory approach to cryptocurrencies is a very difficult task:
“But if we start now, we can achieve the political goal of maintaining financial stability while reaping the benefits of fundamental technological innovations.”