IMF Advises How Crypto Should Be Regulated Citing ‘Urgent Need for Cross-Border Collaboration’

The International Monetary Fund published a blog post on cryptocurrency regulation Thursday. The post titled “Global Crypto Regulation Should be Comprehensive, Consistent, and Coordinated” is authored by Tobias Adrian, Dong He, and Aditya Narain from the IMF’s Monetary and Capital Markets Department.

Noting that “Crypto assets and associated products and services have grown rapidly in recent years” and their “interlinkages with the regulated financial system are rising,” the authors acknowledged:

“Policymakers struggle to monitor risks from this evolving sector, in which many activities are unregulated,” they explained, adding: “In fact, we think these financial stability risks could soon become systemic in some countries.”

The IMF post then discusses how cryptocurrency should be regulated. “The global regulatory framework should provide a level playing field along the activity and risk spectrum,” the authors asserted and proceeded to list three elements that should be included.

Firstly, crypto service providers — including those offering storage, transfer, settlement, and custody of reserves and assets — “should be licensed or authorized,” the authors wrote. “Licensing and authorization criteria should be clearly articulated, the responsible authorities clearly designated, and coordination mechanisms among them well defined.”

Secondly, “Requirements should be tailored to the main use cases of crypto assets and stablecoins,” they added, noting that regulators “need to coordinate to address the various risks arising from different and changing uses,” including central banks and securities watchdogs.

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