Joint IMF and FSB Report Warns Against Total Crypto Bans
A joint policy roadmap released by the Financial Stability Board (FSB) and the International Monetary Fund (IMF) has cautioned against outright bans on cryptocurrencies.
The policy paper, commissioned by the G20 under India's leadership, has emphasized the need for comprehensive regulatory oversight to address risks related to crypto-assets.
The IMF-FSB synthesis paper, set to be presented to the G20, is part of a broader effort to establish global norms for the crypto industry following a series of high-profile collapses last year.
The report highlights the importance of strengthening monetary policy frameworks, managing capital flow volatility, and establishing clear tax treatment for cryptocurrencies to tackle macroeconomic risks.
The report echoes the IMF's position that blanket bans on cryptocurrencies may not effectively mitigate associated risks.
Instead, it suggests that targeted restrictions could be useful, especially for emerging economies.
Countries like India have expressed concerns about the potential impact of widespread crypto use on monetary policy in developing nations and have called for stronger prohibitions or specific measures to address these concerns.
The report argued that implementing blanket bans would make all crypto activities illegal within a jurisdiction.
It further added that a blanket ban is not only costly and technically challenging but could also lead to the migration of crypto-related activities to other jurisdictions, creating additional risks.
“They also tend to increase the incentives for circumvention due to the inherent borderless nature of crypto-assets, resulting in potentially heightened financial integrity risks, and can also create inefficiencies."
The report said that
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