The fund says that complete bans are not the best way to limit crypto risks, but they shouldn’t be ruled out either.
According to a statement from its executive board released on Thursday, the International Monetary Fund (IMF) does not think that crypto assets should be made official currencies or legal tender.
The statement was a summary of discussions held earlier this month about the fund’s nine-point plan for how countries should treat crypto assets. The plan is called “Elements of Effective Policies for Crypto Assets.” The paper gave “guidance to IMF member countries on key elements of an appropriate policy response to crypto assets.”
The statement from the fund says that its main suggestion is to “protect monetary sovereignty and stability by strengthening monetary policy frameworks and not making crypto assets official currency or legal tender.”The board said that widespread use of crypto assets “could make monetary policy less effective, get around measures to control capital flows, and make fiscal risks worse.” The IMF urges countries to focus on getting tax rules and laws in place for crypto assets, saying that not doing so is “untenable” now that several crypto exchanges have gone down.
“Directors agreed that strict bans are not the best way to limit crypto risks, but targeted restrictions could be used.” A few directors, on the other hand, thought that complete bans shouldn’t be ruled out… “A comprehensive, consistent, and coordinated response is needed due to the growing use of crypto assets in some countries, the fact that crypto assets and their providers operate outside of their home countries, and the growing connections between crypto assets and the financial system,” the statement said.
Due to bankruptcies in the crypto market, nearly $1.4 trillion was wiped off the market last year. The crisis was caused by the failure of FTX, which at the time of its failure was the second-largest cryptocurrency exchange in the world.
By market capitalization, Bitcoin is the largest cryptocurrency in the world. In recent weeks, it has been slowly making up for losses from last year, but it is still a long way from its all-time high of just over $69,000. Smaller crypto tokens tend to move in the market in the same way that Bitcoin does.