IMF Managing Director, Kristalina Georgieva, stated that the International Monetary Fund's preference is to differentiate and regulate crypto assets, rather than imposing an outright ban. However, she also added that the option of a complete ban remains on the table for the time being.
In an interview with Bloomberg on Feb. 27, Georgieva, who was speaking on the sidelines of the G20 finance ministers meetings in Bengaluru, India, discussed the United Nations financial agency's stance on digital assets and emphasized the importance of regulating the world of digital money as a top priority.
Cointelegraph reports that, regarding her recent comments on the possibility of a complete ban on cryptocurrencies, she clarified that there is still much confusion surrounding the classification of digital money.
“Our first objective is to differentiate between central bank digital currencies that are backed by the state and publically issued crypto assets and stablecoins.”
Fully-backed stablecoins create a “reasonably good space for the economy,” but non-backed crypto assets are speculative, high risk, and not money, she added.
Citing a recent paper recommending global regulation standards, she said that crypto assets cannot be legal tender because they are not backed.
However, the option to ban cryptocurrencies “should not be taken off the table” if they begin to pose a greater risk to financial stability, she warned.
Nevertheless, good regulations, predictability and consumer protection would be a better option, and banning would not need to be considered, Georgieva said.
When asked what could cause the decision to ban crypto, she said that an inability to protect consumers from the rapidly evolving world of crypto assets would be the primary catalyst.
The IMF, the Financial Stability Board, and the Bank for International Settlements are jointly preparing to release regulatory framework guidelines in the second half of the year.
According to Georgieva, stablecoins that are fully-backed offer a reasonable space for the economy, but non-backed crypto assets are speculative, high-risk, and cannot be considered money. She cited a recent paper that recommended global regulation standards and stated that crypto assets cannot be legal tender as they lack backing.
While the option to ban cryptocurrencies remains on the table if they pose a significant risk to financial stability, Georgieva emphasized that good regulations, predictability, and consumer protection would be a better approach. She noted that banning would not need to be considered if these measures are put in place.
Georgieva suggested that the inability to protect consumers from the rapidly evolving world of crypto assets would be the primary reason for a ban. The IMF, the Financial Stability Board, and the Bank for International Settlements are working together to release regulatory framework guidelines in the second half of the year. [pc]
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