IMF cues could help the world align crypto rules
Our chance of governing digital tokens to mitigate risks effectively would depend on how closely countries coordinate their approach. The Fund could play a significant role in this
Echoing what India recently suggested, a blog published by the International Monetary Fund (IMF) has called for coordinated regulatory frameworks designed to mitigate crypto risks. The blog-post’s authors Tobias Adrian, Dong He and Aditya Narain warn of the impact that unregulated proliferation of crypto tokens could have on financial stability, especially in emerging markets. To the extent that these views reflect the Fund’s internal discussions, we can assume they may influence its official stance on a matter critical to the future of finance. The conundrum of crypto valuation is only one of many perplexities. Regulators must tackle a panoply of issues ranging from investor protection and the safety of crypto exchanges and wallets to worries of opacity and mendacity on reserves held by some crypto issuers to back their stablecoins. The blog broadly suggests that crypto assets be regulated separately from digital tokens that serve as a medium of exchange. Within this frame, its proposals include the licensing of crypto-asset service providers involved in their storage, transfer, etc, and the systemized custody of assets, as rules often require for other asset classes.