The organization’s new report notes the need for comprehensive regulation of the industry

IMF recognizes the importance of digital assets

06.09.2022 - 08:55

383

2 min

What’s new? According to a report by the International Monetary Fund (IMF), crypto assets have evolved from “niche products” to widespread financial instruments over the past few years. However, IMF capital markets director Aditya Narain and assistant director Marina Moretti note that digital assets have begun to be used more frequently for speculative purposes, which has caused the need for enhanced comprehensive regulation of the space.

What else did the report say? The authors of the document also added that the recent failures of some issuers, exchanges, and hedge funds have “added impetus to the push to regulate.” Probably referring in particular to the collapse of the Terra blockchain and the bankruptcy of Three Arrows Capital.

Nevertheless, according to Narain and Moretti, developing a regulatory framework for crypto assets is an uphill battle because of the rapid development of the market, the difficulty of monitoring, and the lack of practical skills of the regulators themselves.

The report’s authors also pointed to an inconsistent approach to developing laws for digital assets.

“Some regulators may prioritize consumer protection, others safety and soundness or financial integrity. And there is a range of crypto actors — miners, validators, protocol developers — that are not easily covered by traditional financial regulation,” they explained.

Instead, the IMF representatives argued for a coordinated, consistent, and comprehensive global framework for regulating digital assets. In their view, such an approach should “bring order to the markets, help instill consumer confidence.”

In August, the IMF released data showing the growing correlation between cryptocurrencies and the Asian stock market. The report’s authors expressed concern about this trend and pointed to the need for additional regulatory measures.

Earlier, Russian Deputy Finance Minister Alexei Moiseyev said that the Ministry of Finance and the Central Bank rethought their approach to regulating the cryptocurrency market. According to him, the parties may legalize cross-border settlements in digital assets in the near future. However, the regulators still disagree on some points.

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy