Such efforts have become a priority for authorities, the fund said, after the collapse of a number of crypto exchanges and assets over the last couple of years, adding that doing nothing was now "untenable". The top recommendation was to "safeguard monetary sovereignty and stability by strengthening monetary policy frameworks and do not grant crypto assets official currency or legal tender status." The IMF had hit out at El Salvador in late 2021 when the central American country became the first to adopt bitcoin as legal tender, a move that has since been copied by Central African Republic. Other advice on Thursday's list, which comes as G20 decision makers meet in India, included guarding against excessive capital flows, adopting unambiguous tax rules and laws around crypto assets, and developing and enforcing oversight requirements for all crypto market actors.
Countries should also establish international arrangements
to enhance supervision and enforce regulations, the IMF added,
as well as set up ways to monitor crypto's impact on the
stability of the global monetary system.
Outlining its Executive Board's assessment, the IMF said
directors welcomed the proposals and agreed the widespread
adoption of crypto assets "could undermine the effectiveness of
monetary policy, circumvent capital flow management measures,
and exacerbate fiscal risks."
They "generally agreed," too, that crypto assets should not
be granted official currency or legal tender status, and though
strict bans of assets are "not the first-best option," a few
directors thought they should not be ruled out.
(Reporting by Marc Jones; Editing by Leslie Adler)
