April 19, 2024
Global Financial Authorities and IMF Unite to Safeguard Economy from Cryptoasset Risks
Policy & Regulation

Global Financial Authorities and IMF Unite to Safeguard Economy from Cryptoasset Risks

On Thursday, international financial authorities and the IMF laid out a plan for coordinating actions to prevent crypto assets from compromising the stability of the global economy and finances.

According to a study by the Financial Stability Board, the IMF, and the G20’s risk inspector, these risks are sometimes made worse by a disregard for the law.

Many of the alleged advantages of cryptoassets, like more widespread financial inclusion and quicker, cheaper cross-border payments, have not yet materialized, it continued.

“Widespread adoption of crypto-assets could undermine the effectiveness of monetary policy, circumvent capital flow management measures, exacerbate fiscal risks, divert resources available for financing the real economy, and threaten global financial stability,” the paper stated.

The paper outlines deadlines for IMF and G20 members to put new crypto regulation recommendations from the Financial Stability Board and IOSCO, an international association of securities regulators, into practice.

After several years of observing no threat from the industry, opinions have hardened with the collapse of the cryptocurrency exchange FTX last November, which shook markets and left investors recuperating losses. This signals another step in regulatory thinking.

“A comprehensive policy and regulatory response for crypto-assets is necessary to address the risks of crypto-assets to macroeconomic and financial stability,” the report, which will be submitted to G20 leaders at a conference this month in New Delhi, stated.

The first complete set of regulations for cryptoassets has been approved by the European Union, while other regions have taken a patchier approach to a sector that has no borders and in which theft and manipulation are “prevalent”.

The study stated that governments should also avoid running significant deficits, which can result in inflation that weakens fiat currencies and promotes alternatives like cryptoassets.

Along with explaining how current regulations relate to the industry, it is also important to explain the tax status of crypto assets.

Image: Freepik

Related posts

Investors Abandon Class Action Lawsuit Against Terraform Labs and Do Kwon

Chloe Taylor

IMF Director Advocates “Financial Inclusion” Through Digitalization

Kevin Wilson

India to Boost Stock Market Competitiveness Amid Crypto Rise

Eva Moore

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More