- The IMF and the G20 Financial Stability Board (FSB) are seeking a comprehensive response to regulate cryptocurrencies.
- The widespread adoption of cryptocurrencies is seen as a threat to economic and financial stability.
- The report focuses on identifying risks and setting a roadmap for cryptocurrency regulation, without making any new recommendations.
Efforts to reach a universal policy approach to cryptocurrencies took a step forward on Thursday, as two top financial regulators unveiled their plans for coordinated action.
The International Monetary Fund (IMF) and the G20 risk watchdog, known as the Financial Stability Board (FSB), said in a joint document that “to address the risks of cryptocurrency assets to the macroeconomic requires a comprehensive policy and regulatory response.” and financial stability.”
While the paper’s authors acknowledge that connections between cryptocurrencies and the mainstream financial world are limited, they argue that widespread adoption would reduce the effectiveness of monetary policy and that granting cryptocurrencies the status of legal tender would pose a stability risk. Will be done.
The report outlines how the organization will work with other agencies to monitor the potential disruption caused by cryptocurrencies, as well as implement a series of high-level recommendations made by the FSB earlier this year.
The report suggested that if jurisdictions want to protect their economies from a potential crisis, they should “safeguard monetary sovereignty and strengthen the monetary policy framework, avoid excessive volatility in capital flows, and ensure clear trading of crypto assets.” tax treatment should be adopted”.
The report made no new recommendations, instead focusing on identifying risks and establishing a roadmap for the future.
The FSB and the IMF also raised concerns about stablecoins, stating that their widespread use could lead to fragmentation in global payments and pointing to the 2022 collapse of the Luna/Terra ecosystem as an example of market failure. But how can there be a secondary effect.
However, central bank digital currencies (CBDCs) are not included in the scope of the latest report, despite the increase in the number of countries planning to issue them. There is no mention of NFTs in the report either.
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