CEFI

IMF's Nine Regulatory Recommendations: Cryptocurrencies to Continue Development with Potential Benefits, But Should Not Be Granted Legal Tender Status

share
IMF

The International Monetary Fund (IMF) Board has released a set of soft guidance documents for countries to reference. The aim of these recommendations is to assist IMF members in formulating policies related to cryptocurrencies while aligning with the IMF's goal of achieving financial stability.

Table of Contents

The IMF points out:

In the event of exchange failures and related parties leading to the collapse of cryptocurrencies, formulating effective policies for cryptocurrencies has become a key priority for authorities. Despite the downturn in the macroeconomy, cryptocurrencies may continue to develop, and doing nothing at this point is untenable.

The document proposes nine frameworks:

  1. Strengthening fiat currency policies to maintain currency sovereignty stability and not granting cryptocurrency fiat status.

  2. Preventing excessive volatility in fund liquidity.

  3. Analyzing and disclosing relevant financial risks, and clearly taxing cryptocurrencies.

  4. Establishing certainty in cryptocurrency regulations.

  5. Prudent law enforcement and supervision of all participants in the cryptocurrency market.

  6. Establishing a cross-departmental, cross-border joint monitoring framework.

  7. Establishing cross-border cryptocurrency law enforcement and supervision.

  8. Monitoring the impact of cryptocurrencies on the stability of the international monetary system.

  9. International cooperation to develop alternative solutions for cross-border payments and digital financial infrastructure.

The IMF believes that adopting this framework can not only help countries reduce the risks of cryptocurrencies but also further leverage the potential advantages of related technological innovations, especially as the proportion of countries adopting cryptocurrencies continues to rise, consistent and coordinated response measures should be taken.

The board also made several points regarding the current status of cryptocurrencies:

  • The potential advantages of cryptocurrencies have not yet emerged but significant risks have been revealed.

  • Comprehensive regulations need to be established, ensuring consistency in standards.

  • It is unanimously believed that a ban is not the best option, and regulation should not stifle innovation. Some directors do not rule out the possibility of a total ban.

  • Emphasizing the promotion of three principles: same activities, same risks, same regulation.