- The IMF and FSB have outlined new crypto policies for the G20 Leaders’ Summit.
- The bodies are wary of widespread adoption.
- A blanket ban is off the table.
The International Monetary Fund (IMF) and the Financial Stability Board (FSB) have published a joint synthesis paper for crypto regulation proposals at the request of the Indian G20 presidency.
The paper will be submitted to G20 members ahead of the upcoming Leaders’ Summit scheduled for September 9 and 10 at the Bharat Mandapam International Exhibition-Convention Centre (IECC), New Delhi.
Concerns About Widespread Adoption
The two financial bodies are concerned about the effects of widespread crypto adoption, noting that it could undermine the effectiveness of monetary policy, exacerbate fiscal risks, and potentially divert resources available for financing the real economy, ultimately threatening global financial stability.
While there are expectations of a growing consensus on a unified crypto oversight framework among G20 members, the paper recommends a comprehensive policy and regulatory response for crypto assets at jurisdictional levels, asserting that the approach can help address the macroeconomic and financial stability risks.
In particular, the paper urges emerging markets to take additional measures that supersede the global regulatory baseline to combat specific risks.
“To address macroeconomic risks, jurisdictions should safeguard monetary sovereignty and strengthen monetary policy frameworks, guard against excessive capital flow volatility, and adopt unambiguous tax treatment of crypto-assets,” the paper read.
Blanket Ban Not an Option
IMF and FSB warn that governments and financial regulatory institutions shouldn’t impose a blanket ban on crypto assets as it is not an “easy option” unless informed by a thorough assessment and affirmation of money laundering and terrorism financing.
The paper urges states to implement the Financial Action Task Force (FATF) anti-money laundering and counter-terrorist financing standards that apply to virtual assets and virtual asset service providers to curb prevalent and unforeseen crypto-asset misuse risks.
Read why Turkey is rapidly turning to cryptocurrencies:
Inflation-Ridden Turkey Turns to Bitcoin: Will the Rest of the World Follow?
Read why India’s Prime Minister is advocating for a global crypto framework:
India’s PM Modi Calls for Unified Global Crypto Regulations
