IMF Urges Regulation on Crypto
TECH DIGEST- During the digital currency conference in Seoul, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), emphasized the pressing need for regulatory measures governing cryptocurrencies. Citing potential risks to financial stability, Georgieva highlighted the challenge posed by the widespread adoption of crypto assets and its potential impact on macro-financial stability.
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During her opening speech, Georgieva outlined concerns that elevated adoption of crypto assets could undermine essential facets of the financial landscape. These concerns encompassed potential threats to monetary policy transmission, the effectiveness of capital flow management measures, and fiscal sustainability due to the volatile nature of tax collection associated with cryptocurrencies.
“Our goal is to make a more efficient, interoperable, and accessible financial system by providing rules to avoid the risks of crypto, and infrastructure by leveraging some of its technologies,” stated Georgieva at the joint conference with the South Korean government and central bank. She clarified that the intention behind regulatory measures is not to stifle innovation or revert to a pre-crypto era but rather to establish guidelines that foster innovation while mitigating risks.
“Good rules can spur and guide innovation,” Georgieva emphasized, positioning regulatory frameworks as enablers rather than impediments to progress in the crypto space. In a panel discussion on the development of digital money, she underlined that policymakers have a choice: to actively participate and contribute to the development of digital currencies or risk being sidelined as the evolution unfolds independently.
Georgieva stressed the “tremendous interest” in cross-learning from different jurisdictions, with a notable emphasis on gleaning insights from emerging markets. India, in particular, stood out for its digital public infrastructure, presenting valuable lessons for others in the journey toward a digital financial future.
As the IMF encourages a proactive approach to crypto regulation, the global financial landscape awaits a strategic and collaborative effort to harness the benefits of digital currencies while safeguarding financial stability. The evolving narrative around crypto regulation is poised to shape the future of financial systems worldwide.
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