The International Monetary Fund (IMF) has expressed its preference for regulating crypto assets, including stablecoins, rather than imposing an outright ban. IMF's Managing Director, Kristalina Georgieva, stated during the G20 finance ministers meetings in Bengaluru, India that differentiating and regulating digital assets are the agency's top priorities. However, the IMF has not ruled out the option of banning cryptocurrencies entirely if they pose a significant risk to financial stability.
In a recent interview with Bloomberg, Georgieva said that much confusion still exists around the classification of digital money. The IMF's first objective is to differentiate between central bank digital currencies (CBDCs) that are backed by the state and publicly issued crypto assets and stablecoins. Fully-backed stablecoins can create a «reasonably good space for the economy,» while non-backed crypto assets are speculative, high risk, and not money.
Georgieva cited a recent paper recommending global regulatory standards for crypto assets, which stated that they cannot be legal tender because they are not backed. However, if crypto assets begin to pose a greater risk to financial stability, the IMF would not rule out the option of banning them. Nevertheless, Georgieva emphasized that good regulations, predictability, and consumer protection would be the better approach, and banning would not need to be considered.
Georgieva explained that an inability to protect consumers from the rapidly evolving world of crypto assets would be the primary catalyst for banning cryptocurrencies. The IMF, the Financial Stability Board, and the Bank for International Settlements are jointly preparing to release regulatory framework guidelines
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