Crypto Ban May Not Be Best Approach to Balance Risk, Demand: IMF

The IMF recommended that countries focus on addressing the drivers of crypto demand and unmet digital payment needs.

AccessTimeIconJun 23, 2023 at 10:17 a.m. UTC
Updated Jun 26, 2023 at 8:17 p.m. UTC
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Banning crypto may not be the best way of mitigating the associated risks, the International Monetary Fund said Thursday, just months after suggesting that approach as an option, because it would also prevent countries gaining the associated benefits.

"While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run," The IMF said in a website post about interest in central bank digital currency (CBDC) adoption in Latin America and the Caribbean. "The region should instead focus on addressing the drivers of crypto demand, including citizens’ unmet digital payment needs, and on improving transparency, by recording crypto asset transactions in national statistics."

Latin American countries like Brazil, Argentina, Colombia, and Ecuador in 2022 were among the top 20 for global adoption of crypto assets, the IMF said. Yet Argentina banned crypto use in May that year.

Worldwide, many countries are exploring central bank digital currencies, or digital representations of their local currencies issued by their central bank. The Bahamas and Nigeria have already issued a CBDC while the European Union's draft law on the digital euro is on track to be released this month.

Edited by Sheldon Reback.


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Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.

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