IMF executives call for a globally coordinated cryptocurrency regulation framework
(Kitco News) - The International Monetary Fund's (IMF) interest in the realm of cryptocurrencies is on the rise as evidenced by a report from two senior executives with the United Nations agency that is calling for a global cryptocurrency regulatory framework.
In the report entitled Regulating Crypto, IMF Monetary and Capital Markets Department’s deputy director, Aditya Narain, and assistant director, Marina Moretti, suggested that a global regulatory framework for crypto assets is needed in order to protect users, engender order in the markets and encourage innovation.
“A global regulatory framework will bring order to the markets, help instill consumer confidence, lay out the limits of what is permissible, and provide a safe space for useful innovation to continue,” the authors said.
One of the main reasons a globally coordinated response is needed, according to Narin and Moretti, is because national authorities have thus far adopted very different approaches in their regulatory policies for crypto assets, which has led to a disconnected system of regulation.
“The resulting fragmented global response neither assures a level playing field nor guards against a race to the bottom as crypto actors 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 prohibited the issuance, holding, or use of crypto assets by residents while others have welcomed cryptos with open arms and crafted legislation designed to “woo companies to develop markets in these assets.”
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The resulting disarray has led to various jurisdictions working in opposition to each other when it comes to regulatory matters, creating confusion for both users and regulators alike. The longer things continue to develop in this manner, “the more national authorities will get locked into differing regulatory frameworks,” the authors warned.
“This is why the IMF is calling for a global response that is (1) coordinated, so it can fill the regulatory gaps that arise from inherently cross-sector and cross-border issuance and ensure a level playing field; (2) consistent, so it aligns with mainstream regulatory approaches across the activity and risk spectrum; and (3) comprehensive, so it covers all actors and all aspects of the crypto ecosystem,” the report concluded.
This call for a united regulatory framework for cryptocurrencies follows recent comments from several members of the IMF calling for the creation of a Central Bank Digital Currency (CBDC) settlement platform to help incorporate the latest advancements in blockchain technology and payment services into the banking market and global payments infrastructure.