IMF states that crypto regulation needs to become a priority since crypto assets are now mainstream

Image: Shutterstock

Crypto assets have moved from being niche products for a particular group of people to having a mainstream presence. The International Monetary Fund (IMF) says that this calls for the need for more comprehensive and well-rounded regulation measures around the crypto sphere.

In a report authored by Aditya Narain, IMF capital markets director, and Marina Moretti, assistant director, they said that crypto assets are no longer “niche products”, and are now used for speculative investments, act as hedges against weaker currencies and are also payment instruments.

They further stated, “the failures of crypto issuers, exchanges and hedge funds have added impetus to the push to regulate these digital assets.”

Narain and Moretti have acknowledged that developing regulatory frameworks is as difficult as it sounds due to the rapidly changing nature of the markets, as well as the difficulty in monitoring and the absence of workable skills of regulators. They said, “Regulators are struggling to acquire the talent and learn the skills to keep pace given stretched resources and many other priorities.”

In the report, which was released on September 5, the authors also called out the inconsistent approach many regulators are taking for crypto regulation. They advocated for a coordinated and consistent effort to form a comprehensive global crypto regulatory framework. Narain and Moretti wrote,“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.” Further in the report, they continued, “A global regulatory framework will bring order to the markets, help instill consumer confidence, lay out the limits of what is permissible, and provide a safe space for useful innovation to continue.”