IMF Managing Director Says Banning Crypto Assets Should Be an Option

IMF Managing Director Says Banning Crypto Assets Should Be an Option

International Monetary Fund (IMF) Managing Director Kristalina Georgieva has called for "more crypto regulation." She said, "We should not take off the table banning those assets" if the regulation fails or implementation is too slow.

IMF Calls for "More" Crypto Regulation

IMF Managing Director Kristalina Georgieva spoke of crypto regulation on Saturday on the sidelines of G20 meetings for finance ministers and central bank governors under India’s presidency in Bengaluru. Commenting on the crypto oversight, she told reporters:

"There has to be more regulation."

Her statement followed a roundtable discussion she co-chaired with the Union Finance Minister, Nirmala Sitharaman. The IMF chief and the Union Finance Minister agreed that besides debt restructuring, regulating cryptocurrencies is the priority for India.

Georgieva explained that the IMF, the Financial Stability Board (FSB), and the Bank for International Settlements (BIS) are committed to establishing a foundation for the regulation of cryptocurrencies that are not issued by governments or central banks. "We have to differentiate between central bank digital currencies (CBDCs) backed by the state from stablecoins, and crypto assets that are privately issued," she explained.

"There has to be a very strong push for regulation," the IMF chief said, adding:

"If regulation fails or implementation is too slow, we should not rule out banning those assets because they may endanger financial stability."

Crypto Assets Cannot Be Accepted as Legal Tenders

The IMF executive board has offered to provide guidance this week to help countries develop effective crypto policies. While most executive board directors agreed that "strict bans are not the first-best option, targeted restrictions could apply, and a few thought "outright bans should not be ruled out."

The board also advised, "Crypto assets should not be granted official currency or legal tender status to safeguard monetary sovereignty and stability." Georgieva echoed the viewpoint on Saturday:

"Crypto assets are nothing, they cannot be accepted as legal tender."

What is your take on IMF Managing Director Kristalina Georgieva’s statements about crypto? Please post your comments.