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(Kitco News) – International Monetary Fund (IMF) interest in the cryptocurrency space is on the rise, as evidenced by a report from two senior UN agency officials that calls for a global regulatory framework to cryptocurrencies.
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In the report titled Regulating Crypto, the Deputy Director of the IMF’s Monetary and Capital Markets Department, Aditya Narain, and Deputy Director, Marina Moretti, suggested that a global regulatory framework for crypto assets is needed to protect users, bring order to markets and encourage innovation.
“A global regulatory framework will bring order to markets, help build consumer confidence, set the limits of what is allowed, and provide a safe space for useful innovation to continue,” the authors said.
According to Narin and Moretti, one of the main reasons why a globally coordinated response is necessary is that national authorities have so far taken very different approaches in their policies for regulating crypto assets, which has leads to a disconnected regulatory system.
“The resulting fragmented global response does not ensure a level playing field or protect against a race to the bottom as crypto players migrate to the friendliest jurisdictions with the least regulatory rigor – while remaining accessible to anyone with internet access,” the authors noted.
Some countries have completely banned the issuance, holding, or use of crypto assets by residents, while others have welcomed crypto with open arms and crafted legislation designed to “seduce businesses into develop markets for these assets”.
The resulting disarray has led various jurisdictions to clash with each other in regulation, creating confusion for users and regulators alike. The longer things continue to develop in this way, “the more national authorities will be locked into different regulatory frameworks,” the authors warned.
“That is why the IMF is calling for a global response that is (1) coordinated, so that it can close the regulatory gaps that arise from inherently cross-sector and cross-border issuance and ensure a level playing field; (2) consistent, so that it aligns with common regulatory approaches across the spectrum of activities and risks; and (3) comprehensive, so that it covers all players and all aspects of the crypto ecosystem,” the report concludes.
This call for a united regulatory framework for cryptocurrencies follows recent comments from several IMF members calling for the creation of a central bank digital currency settlement (CBDC) platform to help integrate the latest advances in blockchain technology and payment services in the banking market and global payments infrastructure.
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IMF Leaders Call For A Globally Coordinated Cryptocurrency Regulatory Framework
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