Comprehensive Crypto Regulations Needed, Not Bans: Joint Statement by IMF and FSB

Are you concerned about the future of crypto assets?

The IMF and FSB have released a groundbreaking report that could change the way we think about crypto regulations.

Learn why they argue that banning is not the solution, and what comprehensive policies could mean for the future of digital currencies.

Providing Guidance for Managing Crypto Asset Risks

On September 7, 2023, the International Monetary Fund (IMF) and the Financial Stability Board (FSB) released a report outlining comprehensive policies and regulatory measures for activities related to crypto assets.

This report was prepared in response to a request from India, the G20 chair country, and offers comprehensive guidance for addressing the financial stability risks posed by activities including stablecoins and decentralized finance (DeFi).

Why Comprehensive Policies and Regulatory Measures Are Essential

The IMF and FSB argue that "banning crypto assets may not be an effective way to mitigate associated risks.

" Instead, they explain that "comprehensive policies and regulatory measures should be introduced for crypto assets."

Addressing Macroeconomic Risks

The report suggests that "countries should protect their monetary sovereignty, strengthen their financial policy frameworks, prevent excessive capital flow fluctuations, and introduce clear tax treatments for crypto assets."

Regulatory Oversight for Financial Stability

It is further elaborated that "comprehensive regulation and supervisory oversight of crypto assets can help address risks to financial stability and fiscal soundness while supporting macroeconomic policies."

The report also comments that "such comprehensive regulation and supervisory oversight should be the foundation for addressing macroeconomic and financial stability risks."

Risks and Considerations for Stablecoins and DeFi

The report points out that "stablecoins have the potential to suddenly become unstable," warning that "they may pose greater risks to financial stability than other crypto assets."

Regarding DeFi, the report explains that "while it has several unique features, DeFi fundamentally does not differ from traditional financial systems."

It warns that "if DeFi attempts to mimic traditional financial systems, it may face amplified risks and vulnerabilities inherent in traditional systems."

The IMF has long opposed a blanket ban on virtual currencies and emphasizes that targeted regulations, considering consumer needs, are crucial.