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IMF would rather regulate crypto instead of banning them: IMF Managing Director

During the G20 finance ministers' meetings in India, Georgieva explained the IMF's stance on digital assets and emphasised the importance of regulating them

Shashank Bhardwaj
Published: Feb 28, 2023 04:08:27 PM IST

IMF would rather regulate crypto instead of banning them: IMF Managing DirectorInternational Monetary Fund managing director Kristalina Georgieva‚Äč; Image: Omer Messinger/Getty Images

As per International Monetary Fund managing director Kristalina Georgieva, the IMF would rather regulate and distinguish crypto assets instead of completely banning them, although banning them is still an option. 

During the G20 finance ministers' meetings in Bengaluru, India, Georgieva explained the IMF's stance on digital assets and emphasised the importance of regulating them. The regulation of digital currency is a significant priority for the organisation.

In a recent interview with Bloomberg, Georgieva discussed the potential ban on crypto. She stated that there is still confusion around how to classify digital money and that the first task is to differentiate between central bank digital currencies and publicly issued crypto assets and stablecoins. 

Fully-backed stablecoins are beneficial to the economy, but non-backed crypto assets are speculative, high-risk, and not money. 

Georgieva referred to a recent paper that recommended global regulation standards, which stated that crypto assets could not be legal tender because they are not backed. 

She warned that the option to ban crypto should not be removed from the table if they pose a risk to financial stability. 

However, she emphasised that good regulations, predictability, and consumer protection would be better options, and banning may not be necessary. 

Georgieva also mentioned that an inability to protect consumers from the fast evolving world of crypto assets could lead to a decision to ban them.

The Bank for International Settlements (BIS), the Financial Stability Board (FSB), and the International Monetary Fund (IMF) are collaborating to create regulatory framework guidelines. These guidelines will be released in the second half of the year.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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