The International Monetary Fund (IMF) published a report stating that crypto assets have gained a “more mainstream presence as speculative investments, hedges against weak currencies, and potential payment instruments.” The IMF has called for a global response to crypto regulation that is coordinated, consistent, and comprehensive.
IMF Officials Discuss Crypto Regulation, Mainstream Adoption
The International Monetary Fund (IMF) published a report titled “Regulating Crypto: The right rules could provide a safe space for innovation” in the September edition of its flagship Finance & Development magazine. The report is authored by IMF’s Monetary and Capital Markets Department deputy director Aditya Narain and assistant director Marina Moretti.
“Crypto assets have been around for more than a decade, but it’s only now that efforts to regulate them have moved to the top of the policy agenda,” the report describes, elaborating:
It’s only in the past few years that crypto assets have moved from being niche products in search of a purpose to having a more mainstream presence as speculative investments, hedges against weak currencies, and potential payment instruments.
“The failures of crypto issuers, exchanges, and hedge funds — as well as a recent slide in crypto valuations — have added impetus to the push to regulate,” the authors noted.
It outlines challenges that crypto regulation faces. “Applying existing regulatory frameworks to crypto assets, or developing new ones, is challenging for several reasons,” Narain and Moretti wrote.
“For a start, the crypto world is evolving rapidly. Given limited resources, regulators are having a hard time finding the right talent and learning the skills necessary to keep up with the pace of change. Monitoring crypto markets is difficult because data are patchy, and regulators find it tricky to keep tabs on thousands of actors who may not be subject to typical disclosure or reporting requirements,” they explained.
Noting efforts on both the national and international levels to develop crypto regulations, the IMF officials said: “The regulatory fabric is being woven, and a pattern is expected to emerge. But the worry is that the longer this takes, the more national authorities will get locked into differing regulatory frameworks.”
“This is why the IMF is calling for a global response” that is coordinated, consistent, and comprehensive, they concluded, elaborating:
The global regulatory system will create order in the market, boost consumer confidence and set limits on what can be done.
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