IMF prefers to regulate crypto than banning it outright: Report

Mar 17, 2023 | wjb news

The IMF prefers to distinguish and regulate encrypted assets rather than enforce outright restrictions, although the nuclear option will still be on the table.

Christia Georgiyeva, chief executive of the International Monetary Fund, gave a speech on the sidelines of the G20 finance ministers' meeting in Bangalore, India, explaining how the UN financial company views data assets and what it wants to see at the regulatory level.

"We are in favor of global regulation of digital currencies," she admits, which is also a top priority.

In a recent interview published by Bloomberg News on Feb. 27, she responded to her recent remarks about the possibility of explicitly banning encrypted money. There is still some confusion about the types of digital currencies, she said.

"our first aim is to distinguish between the digital currency of the central bank encouraged by our country and the long-term stable loan currency of encrypted assets issued to the public."

She added that thoroughly encouraged smooth assets created "a very better indoor space for economic development", but non-encouraged encrypted assets were foreign exchange speculative and high-risk, not loan currencies.

Citing a recent graduation thesis proposing regulatory standardization around the world, she said that encrypted assets cannot be used as currency in circulation because they do not have loan guarantees.

However, she warned that the option of encrypting money would be prohibited "irrevocably" if it posed a higher risk to financial security.

Even so, better regulation, predictability and consumer protection are undoubtedly the best options, and there is no need to consider restrictions, Georgieva said.

When asked what led to the decision to ban encryption, she said that the inability to protect customers from the global impact of rapidly growing encryption assets was undoubtedly a key metal catalyst.

The International Monetary Fund, the Financial Stability Board and the Bank for International Settlements are working together to announce the basic guidelines of the regulatory framework in the second half of the year.