The International Monetary Fund (IMF) has created an in-depth nine-point scheme for countries to adhere to concerning crypto assets, begging them not to provide legal tender status towards cryptocurrencies like bitcoin.
IMF Emphasizes That Cryptocurrencies Should Not Be Granted Official Currency Status
The international lender of last resort has announced that its Executive Board recently discussed a document, “Elements of Effective Policies for Crypto Assets,” which outlines appropriate policy responses to cryptocurrencies and other digital assets. This is due to the numerous collapses experienced by crypto exchanges and coins in recent years – leading authorities to decide that taking no action was now inconceivable.
To safeguard economic sovereignty and stability, the top recommendation was strengthening monetary policy frameworks and rejecting granting crypto assets official currency or legal tender status.
In late 2021, the IMF condemned El Salvador for becoming the first country to recognize Bitcoin as a legal tender, prompting the Central African Republic to follow suit. On Thursday’s list of advice from G20 decision-makers in India was a warning against excessive capital flows and urging that unambiguous tax rules and laws be put into place surrounding crypto assets. Furthermore, stronger oversight requirements should be developed and enforced for all involved with cryptocurrency markets.
Countries Should Cooperate With Each Other To Increase Supervision
To ensure more efficient supervision and regulation, countries need to create international agreements with one another. Furthermore, they need to provide a way of analyzing the effect cryptocurrencies have on the global financial system’s stability. This is according to an analysis made by The IMF.
The IMF’s Executive Board evaluated the proposals and issued a statement declaring that if crypto assets become more widely adopted, it could undermine the efficiency of monetary policy, skirt existing capital flow measures, and escalate fiscal risks. The Board members unanimously agreed that digital currencies should not be granted official currency or legal tender status while also noting that completely outlawing them would not be ideal either; several Directors argued against any outright bans.
You might check: Introduction to Theta Network Coin: What is it and Why Should You Care?
