On Thursday, the International Monetary Fund (IMF) and the Financial Stability Board (FSB) published a mutual report along with others. It consisted of a mutual policy roadmap under the leadership of India. It promotes a thorough supervisory and regulatory oversight of cryptocurrencies, labeling it as a baseline for tackling several financial risks.
IMF and FSB’s Mutual Policy Paper Warns Against Outright Crypto Prohibitions
As per the reports, the G20 will witness the presentation of the IMF-FSB paper this weekend. It is included in a list of endeavors that the international bodies make to establish worldwide standards for the market. At present, this matter has gained a lot of attention, especially after the huge collapses of many crypto enterprises back in the last year. The report also made suggestions to deal with the crypto-related macroeconomic risks.
In this respect, the report stated that jurisdictions should fortify monetary policy-related agendas. The other obligations include the adoption of transparent taxation concerning crypto and guarding against extreme volatility of capital flow. The report reinforced the stance of the IMF. It says that outright prohibitions on crypto assets may be of no help. It added that it will do nothing to mitigate associated risks.
Jurisdictions such as India have expressed apprehensions regarding the increased threat from the extensive use of cryptocurrency to their monetary policies. Hence, they have requested the policy-making agencies to recommend solider bans or deal with those particular concerns.
The Paper Supported Provisional Restrictions for the Management of Risk Factors
According to the report, the blanket bans could additionally pave the way for the migration of such operations to other areas. It claimed that this would potentially develop spillover risks. However, it clarified that this does not support the elimination of all the prohibitions. It supported provisional restrictions for the management of a few risk factors in depressive times or during the countries’ struggle for improved internal fixes.
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