Banning crypto ‘may not be effective in the long run’ – IMF

The International Monetary Fund (IMF) has reiterated its call for crypto regulation in some countries, but has said that a complete ban may not be the best approach.

In a June 22 report on Latin America and the Caribbean, the I.M.F. spiked The different approaches adopted by local governments to the adoption of cryptocurrencies and central bank digital currencies, or CBDCs. Bitcoin (BTC) has been accepted as legal tender in El Salvador since September 2021, while the Bahamas was the first country to launch its own CBDC, the Sand Dollar, in October 2020.

The IMF said that Brazil, Argentina, Colombia and Ecuador — whose governments’ regulation of crypto is “in progress” — are among the world’s highest countries for digital asset adoption in an effort to help unbanked people send payments faster and cheaper. are one of the , even more. In addition, according to the fund, most central banks in the region “are considering or are considering adopting digital currencies.”

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“If designed well, CBDCs can strengthen the utility, flexibility and efficiency of payment systems and enhance financial inclusion in (Latin America and the Caribbean),” the IMF said. “While some countries have completely banned crypto assets considering their risks, this approach may not be effective in the long run. Instead the sector should focus on addressing the drivers of crypto demand, including citizens’ unmet digital payment needs and improving transparency by recording crypto asset transactions in national statistics.

The IMF has often made public statements opposing countries adopting cryptocurrencies as legal tender. On June 19, Tobias Adrian, director of its monetary and capital markets department, proposed a payment system that used a ledger to record CBDC transactions – an idea that was met with harsh criticism from many in the crypto sector. Received criticism.

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