The chief economist at the International Monetary Fund (IMF) says that regulation is “absolutely important” for the crypto sector. Her comments were accompanied by the observation that bans on crypto currencies, as India may be contemplating, would present practical problems due to their decentralized nature.
IMF’s Chief Economist on Cryptocurrency and Its Regulation
Gita Gopinath, chief economist at the International Monetary Fund (IMF), reportedly spoke out about cryptocurrency Wednesday during an event hosted by National Council of Applied Economic Research.
Gopinath is also the IMF’s economic counselor and director of its research department. She is on leave of public service from Harvard University’s economics department where she is the John Zwaanstra professor of international studies and of economics. Gopinath, who is expected to become the IMF’s second deputy managing director by the end of this year.
She stated:
It appears that cryptocurrencies seem to be more popular for emerging markets than they are for the developed world.
Noting that “cryptocurrencies are a particular challenge for emerging markets,” she further opined, “emerging markets have exchange rate controls, capital flow controls, and cryptocurrencies can impact that.”
Gopinath said:
This sector needs regulation. This sector should be regulated if it is used as an investment asset.
Her comments were accompanied by the observation that bans on cryptocurrency would be difficult to implement due to their centralization. This highlights the importance of a worldwide policy regarding cryptocurrency.
The IMF made some suggestions last week on how cryptocurrency should regulate. It noted that it is urgent for international collaboration and cooperation in cryptocurrency regulation. The authors said, “Crypto assets are potentially changing the international monetary and financial system in profound ways.”
El Salvador was also warned by the IMF in November not to use bitcoin as a currency. In September, the country declared bitcoin legal tender along with the U.S. dollars and purchased 1,370 bitcoins to fund its treasury.
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