IMF Outlines Need for Global Approach to Crypto Regulation
The IMF called for a “comprehensive, consistent and coordinated” approach to harness the benefits of crypto’s underlying technology while mitigating its risks.
Dec 10, 2021 at 1:12 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/QSRVIOVCPJAPDL2IB2NQU6PVBA.jpg)
IMF (Shutterstock)
/arc-photo-coindesk/arc2-prod/public/LXF2COBSKBCNHNRE3WTK2BZ7GE.png)
The International Monetary Fund (IMF), the financial institution focused on maintaining worldwide financial stability, has outlined its proposal for establishing a global regulatory framework for crypto.
The IMF called for a “comprehensive, consistent and coordinated” approach in order to harness the benefits of crypto’s underlying technology while mitigating some of its risks, in a blog published on Thursday.
This will prove a “daunting task,” the IMF said. “But if we start now, we can achieve the policy goal of maintaining financial stability while benefiting from the benefits that the underlying technological innovations bring.”
According to the IMF, regulating crypto at a global level should have three core elements:
- “Crypto-asset service providers that deliver critical functions should be licensed or authorized. These would include storage, transfer, settlement and custody of reserves and assets, among others, similar to existing rules for financial service providers.”
- “Requirements should be tailored to the main use cases of crypto assets and stablecoins. For example, services and products for investments should have requirements similar to those of securities brokers and dealers, overseen by the securities regulator. Services and products for payments should have requirements similar to those of bank deposits, overseen by the central bank or the payments oversight authority.”
- “Authorities should provide clear requirements on regulated financial institutions concerning their exposure to and engagement with crypto.”
Last month, the IMF warned of the increasing use of crypto in the developing world – something it referred to as “cryptoization” – which could destabilize economies and hamper central banks’ monetary policy.
:format(webp)/s3.amazonaws.com/arc-authors/coindesk/008ae87f-5c6e-412b-816b-ded600ac5054.png)
Jamie Crawley is a CoinDesk news reporter based in London.