IMF Leans Towards Crypto Regulation Over Outlawing It
The International Monetary Fund (IMF) has taken a more moderate stance towards cryptocurrency regulation as compared to most of the governments in the world, which have chosen to outright ban cryptocurrencies and the activities related to them like trading and mining.
The Reason why IMF Favours Regulation
The IMF believes that while there are some risks attached with cryptocurrencies, outlawing such activities would not be a fruitful policy. The IMF argues that the crypto sector is still at a very nascent stage and cannot be shut down. In order for easy adoption and growth of the crypto sector, it is essential to consider a more balanced regulatory approach that will consider the views and interests of all stakeholders.
IMF’s Suggested Policy Reforms
In order to promote a more effective regulatory approach, the IMF has proposed the following policy reforms:
- Data Collection: The IMF recommends that authorities collect data on the cryptocurrency sector, so that there is greater transparency and risk analysis which will help identify money laundering and other fraudulent activities.
- Stricter Regulations: The IMF recommends the implementation of stricter regulations, especially in the areas of disclosure, holding and disclosure standards, KYC/AML standards, investor protections and taxation.
- Reporting System: The IMF recommends the setting up of a reporting system which would report to the central bank from all crypto related activities. This would help ensure greater compliance and provide better oversight.
- Regulating Exchanges: The IMF recommends that crypto exchanges should be subject to regulations as a means of reducing the risk of fraud and money laundering.
The IMF’s approach to regulating the cryptocurrency sector is a more moderate one as compared to most of the governments around the world, which have either banned or are still in the process of outlawing cryptos and related activities. It clearly seeks to promote the growth of the sector by providing regulatory clarity, proposing reforms and protecting investors.