Regulating cryptocurrencies is difficult without global consensus, says IMF official

Regulating cryptocurrencies is difficult without global consensus, says IMF official

One of the leading economists of the International Monetary Fund (IMF), gave a speech in which she points out the importance of global regulation of cryptocurrencies. According to her opinion, this market without a common consensus can get out of control.

A firm opinion

Gita Gopinath is a leading figure in the IMF. She is about to become the first deputy managing director of this global institution. During one of her economic lectures in New Delhi, she expressed her concerns about the current situation in the cryptocurrency market.

According to Gopinath, the lack of uniform regulations across the globe, could lead to the nullification of individual countries’ efforts in trying to influence the crypto sector. According to Gopinath, different countries are trying different solutions, including bans. However, their effectiveness is questionable as exchanges pushed out of some economies are operating in compliance in others.

Gita Gopinath also shared insights on a particular group of countries:

“It seems that cryptocurrency adoption in emerging economies is more attractive than in developed economies. If you look at the interest around the world, we certainly see rapid adoption in emerging and developing economies.”

This raises concerns for her, as these types of countries, as a result of what she believes are inappropriate capital flows, may experience a kind of bypass of the assumed form of money flows, affecting the financial stability of a country. 

In further words, Gopinath points to the current uses of cryptocurrencies and the problems associated with them:

“If people are using them as an investment class, then the same regulations that apply to securities traders and brokers dealing in securities should apply to crypto assets. If, on the other hand, regulated financial institutions invest in crypto assets, the same amount of capital buffer requirements should apply as in traditional markets, resulting in the need for regulation.”

What is the regulatory outlook for the crypto market?

Market observers and analysts of the IMF’s top economist’s words indicate that her proposal is difficult to meet and may even border on impossible. While the world’s leading economies have a chance to reach a common consensus, we cannot count on all countries of the world to follow suit. We are already seeing two extreme cases, namely China, which has completely banned cryptocurrencies and El Salvador, which has made Bitcoin legal tender. According to UN data, there are currently 195 countries in the world. It is difficult to assume that all of them will express exactly the same position, in the face of such a divisive topic.

Disclaimer: Blockbulletin does not take accountability of investments based on the information of the website. We highly advice readers to make extensive research prior to any invest

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