IMF reiterates call for crypto regulation after the ecosystem's 'rough year'

cointelegraph.com:

The International Monetary Fund, or IMF, has pointed to the collapse of FTX as well as “turmoil” in the banking sector in its calls for regulation of digital assets.

In its Global Financial Stability Report released on April 11, the IMF renewed calls for “comprehensive and consistent regulation and adequate supervision” following the failures of cryptocurrency firms including FTX as well as the subsequent collapse of crypto-friendly banks, including Silicon Valley Bank and Signature Bank. According to the financial agency, regulation for entities in the crypto asset ecosystem — with “strict prudential requirements” for stablecoin issuers — should include the storage, transfer, exchange, and custody of reserves for digital assets.

“[Silicon Valley Bank]’s spillover from the core financial sector reverberated across the crypto ecosystem and financial institutions exposed to it,” said the report. “Its failure resulted in a depegging of two stablecoins (Circle USDC and Dai), which held uninsured deposits in the bank, as well as the demise of Signature Bank of New York because investors became concerned about its footprint in the crypto sector. These events add to questions about the viability of digital assets and reinforce the need for appropriate regulation.”

Clear communication by central banks is vital to minimize economic and financial uncertainty, and using separate tools to achieve monetary policy and financial stability goals can address multiple challenges at once. https://t.co/FbiSNdCpVd #GFSR #IMFpublications pic.twitter.com/rCBJQEyi6Y

The report cited a “rough year for crypto” in 2022, pointing to the collapse of the FTX exchange — not the failures of Terraform Labs, Celsius Network, or others which preceded the