IMF proposes policy recommendations on crypto assets, emphasizing global "same activities, same risks, same regulations"

The International Monetary Fund IMF stated that global policy demands for crypto assets are gradually strengthening under the leadership of India, the G20 chair, but more efforts are still needed, particularly in implementing global standards. The IMF has put forward policy recommendations and guidelines, emphasizing global "same activities, same risks, same regulations" to maintain monetary sovereignty, protect investor interests, and promote financial stability.

IMF Policy Recommendations and Guidelines

The IMF stated that some policymakers have taken necessary measures to protect investor interests, ensuring consumer safety and financial integrity. However, it is equally important to consider the broader impact of crypto assets, especially stablecoins that may replace official currencies and have significant implications for a country's currency and fiscal policies. Therefore, a comprehensive, consistent, and coordinated approach is needed in formulating crypto asset policies, particularly in emerging markets and developing economies.

The IMF presented the following key policy recommendations:

• Maintain sound, trusted domestic institutions and ensure a transparent, consistent, and coordinated monetary policy framework to address challenges posed by crypto assets.
• To safeguard monetary sovereignty, crypto assets should not be granted legal tender status, but their tax and legal status should be determined to avoid negative impacts on government finances, financial stability, and inflation.
• To address the volatility of capital flows caused by crypto assets, they should be integrated into existing capital flow management systems and regulations to ensure stability and reduce potential disruptions. Additionally, regulators should enhance compliance efforts, requiring specific regulations to clarify the tax treatment of crypto assets, including value-added tax, income tax, or wealth tax.

Clear Legal Framework and Detailed Rules

Effective regulation of crypto assets requires establishing a clear legal framework and detailed rules. Policymakers should follow the principle of "same activities, same risks, same regulations" to guide relevant regulatory work. In terms of legal framework, a comprehensive legal basis should be established to ensure predictability and enforceability of crypto assets. Furthermore, anti-money laundering, combating the financing of terrorism, prudential, and behavioral rules should be implemented, covering all entities and activities related to crypto assets.

Effective Implementation and International Coordination

Ensuring effective crypto asset policies requires strengthening coordination at domestic and international levels. National authorities should align their frameworks based on established standards and guidelines to achieve consistent treatment of crypto assets. Additionally, regulatory agencies need to build robust regulatory capacities to effectively monitor and enforce rules. Given the borderless nature of crypto assets, international cooperation and information sharing are crucial. Collaboration among regulatory authorities will help monitor and ensure the effectiveness of regulatory policies.

The IMF emphasizes that appropriate regulation of crypto assets is essential in ensuring stable development of the financial system in the digital age. Therefore, a globally consistent and coordinated policy framework is needed to address the challenges posed by crypto assets. The IMF will also submit a paper jointly written with the Financial Stability Board (FSB) at the G20 Leaders' Summit in September, highlighting the construction modules of crypto asset policies.