The rapid growth of crypto assets, related products and services, and connections to the regulated financial system reinforces the need for global regulation of cryptocurrencies, represented, consistently and coordinated by regulators around the world.
The IMF believes that The global regulation of cryptocurrencies is to be comprehensively strengthened
According to an article published by International on the website of an international financial institution based in Washington:
“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 conducted by Tobias Adrian, Financial Advisor and Director of the IMF’s Money and Capital Markets Department, Dong He, Deputy Director of Money and Capital Markets (MCM) at the IMF, and Aditya Narain, Deputy Director of the MCM Board of Directors.
The three authors argue that uncoordinated regulatory measures could facilitate potentially destabilizing capital flows around the world.
“While a market cap of nearly $ 2.5 trillion demonstrates the substantial economic value of fundamental technological innovations like blockchain, it can also reflect the chill in an ongoing valuation environment. In fact, the first reactions to the Omicron variant of the COVID-19 virus included a significant sale of cryptocurrencies. “
The authors justify the need for global crypto regulation with the fact that “the cross-sector and cross-border transfers of crypto currencies limit the effectiveness of the country approaches”.
In addition, monitoring and enforcement becomes more difficult as many crypto service providers operate across borders.
3 global regulations on cryptocurrencies had been proposed by IMF
The proposed global regulatory framework should ensure a level playing field in terms of the range of activities and risks and should include the following three elements, the contribution states.
Providers of crypto asset services that perform important functions must be licensed or authorized to carry out their activities;
The requirements must be tailored to the key use cases of crypto assets and stablecoins, which means that investment services and products should have similar requirements to those of securities regulators for securities brokers and dealers.
Authorities should define clear requirements for regulated financial institutions with regard to their involvement and participation in cryptocurrencies.
The paper concludes that “there is an urgent need for cross-border collaboration and collaboration to address technological, legal, regulatory and supervisory challenges,” and adds that it is a mission to “provide a comprehensive, coherent and coordinated approach to regulation Cryptocurrencies. “
“But if we start now, we can achieve the political goal of maintaining financial stability while reaping the benefits of fundamental technological innovations,” the authors say.
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