The International Monetary Fund (IMF) has issued a board paper to offer instructions on the drafting of adequate policies by the countries to deal with crypto assets. On February 23, a press release was published by the worldwide monetary organization. IMF mentioned that the respective policy advisory paper deals with the investigations done by the member states of the organization on the risks as well as the benefits of the crypto assets.
IMF Issues Instructions for Crypto Policies and Opposes Crypto Legalization
The global monetary organization also mentioned that the document additionally contains macro-financial considerations like the impact of the crypto assets’ adoption on fiscal and monetary policies. IMF knows about the endeavors made by the authorities operating in countries across the globe to establish a resilient set of regulations to administer crypto assets.
The governments are making such efforts amid the crash of many top crypto exchange platforms and the debacle of several assets in the previous years. With the help of the document related to policy advisory, IMF offers a framework containing 9 points. As per the organization, these points will be assistive in establishing a consistent, coordinated, and comprehensive policy reaction to the escalating utilization of cryptocurrencies.
While remarking on the board paper of the IMF, its executive board disclosed the significance as well as the timeliness of the respective document for the member states. IMF took into account diverse factors like the expanding crypto adoption around the world, the extraterritorial nature of these assets, and the developers in this space.
Also read:The worldwide money lender also revealed that the respective sector’s mounting integrations with the mainstream financial systems point toward the requirement of a worldwide financial system. It added that such a system should have a coordinated, comprehensive, and consistent agenda. Nonetheless, the 24-man entity additionally discussed the hazards posed by the crypto assets to the economies spread around the world.
As per IMF, the likely hazards include their potential to damage the efficiency of a financial policy. Apart from that, it added, the respective assets can also circumvent the systems responsible for the management of capital flow. Another risk that crypto assets pose is that they can worsen the rascal hazards.
Global Lender Emphasizes that Crypto Assets Should Not Be Made Legal Tender
While moving on, it pointed toward the concerns regarding diverse aspects of digital assets, such as market integrity, consumer protection, legal risks, financial integrity, as well as financial stability. Though the IMF proposed 9 points in its board paper, the initial point has been the center of the discussion. This point repeats the stance of the monetary organization against the crypto’s adoption as a legal tender.
It emphasized that the countries busy establishing policies to cope with the crypto assets should protect monetary stability and sovereignty. For this, it recommended the fortification of the monetary policy agendas. Along with this, it opposes the legalization of cryptocurrencies. IMF, for some time, has been very vocal in confronting the utilization of crypto assets as the official currencies.
Back in January last year, a caution was issued by the monetary organization for the Republic of El Salvador as the country had adopted the primary crypto token as its legal tender. In the warning, IMF disclosed the risks linked to this asset class, saying that El Salvador could find difficulties in getting loans from it as a result of this decision.
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