The International Monetary Fund (IMF) came out with a new report that lays out the role of crypto and blockchain in the future. The report also suggests for global regulations for cryptocurrencies.
The world of crypto has been a rollercoaster ride over the last year, with many countries cracking down. With this rapid shift in regulations, it is becoming harder for digital currency to operate in some regions. This makes it more difficult for crypto companies to penetrate new markets, which could lead to limited growth opportunities.
The IMF Directors have proposed that crypto should be regulated globally, not nationally, because they believe that this would result in more stability and reduce the risk of volatility. They believe that greater regulation will help increase confidence and ultimately encourage wider adoption.
Recent research from the International Monetary Fund (IMF) shows that the fast rise of crypto assets, related goods and services, and interconnections with the regulated financial system increases the need for global crypto regulation.
According to a report posted on the Washington-based international banking institution’s website:
Policymakers struggle to monitor risks from this evolving sector, in which many activities are unregulated. In fact, we think these financial stability risks could soon become systemic in some countries.
IMF Financial Counsellor and Director of its Monetary and Capital Markets Department Tobias Adrian, Deputy Director Dong He, and Aditya Narain wrote the report. It looked at how the IMF’s Monetary and Capital Markets department worked.
The authors’ assessment that cryptocurrencies’ “cross-sector and cross-border remit hampers the efficacy of national initiatives” justifies the necessity for global crypto regulation.
Additionally, they said that oversight and enforcement are complicated because a large number of cryptocurrency service providers operate outside national boundaries.