Members of the crypto community know it well: cryptocurrency is a volatile market. The latest events prove it. To minimize risk while protecting all players in the crypto industry, the International Monetary Fund (IMF) has released its recommendations. The main lines focus on market regulation and the establishment of global standards.
IMF: 5 key recommendations to regulate the crypto market
Crypto regulations vary from country to country. Some nations rely on more flexibility. Others choose to establish more drastic measures. There are even countries where crypto service providers (and cryptocurrency itself) have little place. This is the case in Algeria, Tunisia, Morocco, Egypt, Qatar and China.
The International Monetary Fund fully understands the reluctance of some countries towards crypto. He argues however that digital asset will inevitably affect the global financial system. To reduce risks as much as possible and protect investors, it published some recommendations on January 18, 20230
The recommendations of the IMF on crypto relate to 5 essential points:
- Licensing, registration and authorization of crypto service providers
- The establishment of additional prudential requirements for entities that perform multiple functions
- Strict regulations for stablecoin issuers
- Clear legislation for financial institutions
- Establishing comprehensive and consistent standards globally
A particular interest in stablecoins
In its press release, the IMF takes a particular interest in stablecoins. “Stablecoins do not yet pose risks to the global financial system (…) They are cryptographic assets that aim to maintain a stable value against a specified asset or pool of assets,” it explains. .
The IMF concedes a point: it is extremely difficult to contain the risks associated with crypto assets. Difficult, but not impossible! In this sense, the IMF intends to continue its collaboration with the various regulatory authorities around the world.
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