WASHINGTON - IN wake of the dramatic crash of FTX, one of the largest exchanges, the regulation of Cryptocurrency has remained a talking point globally.
International policy makers and agencies have researched and concluded a need for a standard across the board in how to deal with the currency.
In her response to the media on the subject, Julie Kozack, IMF Director of Communications, disclosed that a joint paper was written with the Financial Stability Board (FSB) that looks into the implications of crypto assets for macroeconomic stability, financial stability and regulation.
“And that paper arrives at the conclusion that global standards are needed,” she noted.
Kozack added: “So in particular, the paper proposes some policies for macroeconomic stability, including safeguarding monetary sovereignty, looking at ways to attenuate excessive capital flow, volatility, adopting appropriate tax treatments to address fiscal risks, and monitoring the impact on the international monetary system.”
Cryptocurrencies have been popping up as the newest crave hitting the world, as it is more easier and convenient for people to use; in some instances people have been able to make significant investment returns on them.
But governments across the globe have started to clamp down because of stability questions associated with the currency.
“On financial stability, one important area is to look to close data gaps through reporting requirements within regulation to better ensure consumer protection as well as safeguarding financial stability. So I would refer you to this paper, which is published on our website,” Kozack advised.
In their assessment, the authors of the paper noted that “a comprehensive policy and regulatory response for crypto-assets is necessary to address the risks of crypto-assets to macroeconomic and financial stability”.
The report noted that in order to address macroeconomic risks, “jurisdictions should safeguard monetary sovereignty and strengthen monetary policy frameworks, guard against excessive capital flow volatility and adopt unambiguous tax treatment of crypto-assets”.
“Some jurisdictions, in particular emerging markets and developing economies, may want to take additional targeted measures that go beyond the global regulatory baseline to address specific risks,” the statement read.
According to the IMF, the report sets out a roadmap to ensure the effective implementation of the FSB’s and IMF’s recommendations and standards.
