Some recommendations streamlining regulatory structure and how to move forward in an effort to regulate the digital currency economy globally, have been suggested by International Monetary Fund (IMF). IMF emphasizes that crypto regulation can only be made possible once global countries will sit and work together on one-point agenda.
Digital currency regulation has become a global issue. Although governments of the world are willing to provide for regulation they are simply not well-equipped. While they are trying to carve out a structure, the crypto economy has grown into at least US$ 3 Trillion economies. They are therefore expected to come up with a commendable framework that can address the issues relating to cryptocurrencies.
The issue of crypto regulation is duly acknowledged by International Monetary Fund (IMF) as well. This could be seen from the latest blog post stemming from IMF. The blog post noticed that though crypto regulation is a must yet they have to be devised with mutual cooperation of global states. They cannot be made comprehensive if there is no coordinated effort put in by states of the world.
IMF also acknowledged that the crypto industry is currently the world’s fastest-growing industry. It further noted that while the industry is growing at the same time digital currencies amalgamation and interconnectivity with the regulated space is also growing. IMF suggested that due to the existence of cryptocurrencies, the international monetary system has been altered to great extent.
However, IMF noted that against the crypto market growth, the policymakers have been failing in determining the risks. Within this continuously evolving and changing space, there are innumerable activities that remain unregulated to date. If these activities are not supervised then there is a chance that some of the countries would be affected.
In this connection, a way forward has been devised by IMF which contains recommendations on how this industry can be regulated ultimately. First of all, IMF suggested that crypto service provides of each kind should be registered and operating licenses should be made mandatory. The process of how registration can be done and how licenses can be secured must be duly described without any ambiguity. Similarly, the regulators’ roles should be spelled out clearly, advised IMF.
Secondly, IMF suggested that for the use of digital currencies and stabelcoins, the requirements should also be spelled out clearly. In addition, IMF proposed that requirements should be set up for financial institutions so that anomalies are taken out from the merger of crypto into the regulated space. IMF furthermore acknowledged that within the developing economies and emerging markets, digital currencies can play a vital role.
In the end, IMF advised that collaboration across the borders must be ensured. Crypto poses great challenges and one of the major challenges is to address cases of legality, supervisory, regulatory as well as technological advancement.