The International Monetary Fund would prefer to differentiate and regulate crypto assets rather than enforce an outright ban, though the nuclear option will remain on the table for now.<\/p>\n
Speaking on the sidelines of the G20 finance ministers meetings in Bengaluru, India, IMF Managing Director Kristalina Georgieva explained how the United Nations financial agency views digital assets and what it would like to see in terms of regulation.<\/p>\n
\u201cWe are very much in favor of regulating the world of digital money,\u201d and this is a top priority, she stated.<\/p>\n
During an\u00a0interview\u00a0with Bloomberg\u00a0published on Feb. 27, she responded to a question on her recent comments about a potential complete ban on cryptocurrencies. She said there was still much confusion around the classification of digital money.<\/p>\n
\u201cOur first objective is to differentiate between central bank digital currencies that are backed by the state and publically issued crypto assets and stablecoins.\u201d<\/p><\/blockquote>\n
Fully-backed stablecoins create a \u201creasonably good space for the economy,\u201d however non-backed crypto assets are speculative, high risk, and not money, she added.<\/p>\n
Citing a recent paper recommending global regulation standards, she said that crypto assets cannot be legal tender because they are not backed.<\/p>\n
However, the option to ban cryptocurrencies \u201cshould not be taken off the table\u201d if they begin to pose a greater risk to financial stability, she warned.<\/p>\n
Nevertheless, good regulations, predictability, and consumer protection would be a better option, and banning would not need to be considered, said Georgieva.<\/p>\n