New Delhi: International Monetary Fund ,International Monetary Fundhas warned of the risks posed by cryptocurrency, particularly in emerging and developing countries, and suggested coordinated action to set global standards.
“Determining valuation is not the only challenge in the crypto ecosystem: identifying, monitoring and managing risks to regulators and firms. These include, for example, from operational and financial integrity risks. crypto asset exchange and wallets, investor protection, and insufficient reserves and false disclosures for some stablecoins. Furthermore, in emerging markets and developing economies, the advent of crypto could accelerate what we have termed ‘cryptoisation’ – when these assets replace domestic currency, and bypass exchange restrictions and capital account management measures.” IMF said in a blog.
It also stated that capital flow management may need to be corrected for the following reasons: digital currencies, The comments came because the government is working on a law, and both the PM Narendra Modi and FM Nirmala Sitharaman There has been a call for coordinated global action to deal with this.
“Cross-sector and cross-border remittances of crypto limit the effectiveness of the national approach. Countries are taking very different strategies, and current laws and regulations may not allow a national approach that broadly covers all elements of these assets. Importantly, many crypto service providers operate across borders, making the task more difficult for supervision and enforcement. Unorganized regulatory measures can potentially facilitate destabilizing capital flows ,” it said.
The authors suggested licensing “crypto-asset” service providers along the lines of criteria for financial services players, which include the storage, transfer, settlement, and custody of reserves and assets. Two sets of rules have been proposed – one for services and products for investment, with requirements similar to securities and brokers, and regulation by the securities regulator. The second would apply in cases where the government allows the use of cryptocurrency as a payment instrument, where the IMF has suggested that the rules should be similar to bank deposits with a central bank or payment monitoring.
“regardless of the initial authorization for approval crypto services and products, all observers – from central banks to securities and banking regulators – need to be coordinated to address the various risks arising from the different and changing uses.” Further, it said that regulators need to coordinate with regulated financial institutions. Should set risk criteria for in crypto.
“Determining valuation is not the only challenge in the crypto ecosystem: identifying, monitoring and managing risks to regulators and firms. These include, for example, from operational and financial integrity risks. crypto asset exchange and wallets, investor protection, and insufficient reserves and false disclosures for some stablecoins. Furthermore, in emerging markets and developing economies, the advent of crypto could accelerate what we have termed ‘cryptoisation’ – when these assets replace domestic currency, and bypass exchange restrictions and capital account management measures.” IMF said in a blog.
It also stated that capital flow management may need to be corrected for the following reasons: digital currencies, The comments came because the government is working on a law, and both the PM Narendra Modi and FM Nirmala Sitharaman There has been a call for coordinated global action to deal with this.
“Cross-sector and cross-border remittances of crypto limit the effectiveness of the national approach. Countries are taking very different strategies, and current laws and regulations may not allow a national approach that broadly covers all elements of these assets. Importantly, many crypto service providers operate across borders, making the task more difficult for supervision and enforcement. Unorganized regulatory measures can potentially facilitate destabilizing capital flows ,” it said.
The authors suggested licensing “crypto-asset” service providers along the lines of criteria for financial services players, which include the storage, transfer, settlement, and custody of reserves and assets. Two sets of rules have been proposed – one for services and products for investment, with requirements similar to securities and brokers, and regulation by the securities regulator. The second would apply in cases where the government allows the use of cryptocurrency as a payment instrument, where the IMF has suggested that the rules should be similar to bank deposits with a central bank or payment monitoring.
“regardless of the initial authorization for approval crypto services and products, all observers – from central banks to securities and banking regulators – need to be coordinated to address the various risks arising from the different and changing uses.” Further, it said that regulators need to coordinate with regulated financial institutions. Should set risk criteria for in crypto.
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