IMF Executive Board Evaluates Effective Policy Elements for Cryptocurrencies

Suggested policy actions

The Board of Governors of the International Monetary Fund (IMF) today evaluated a paper on crypto-asset (virtual currency) policy released by the fund and expressed support for the proposed policy framework.

A paper published on the same day (“Elements of Effective Policy for Crypto Assets”) proposes the following nine policy actions:

1. Protect monetary sovereignty and stability by strengthening the monetary policy framework, and deny cryptocurrencies status as official or legal tender.
2. Prevent excessive capital flow volatility and maintain the effectiveness of capital flow management measures.
3. Analyze and disclose fiscal risks and introduce clear tax treatment for cryptocurrencies.
4. Establish legal certainty for cryptocurrencies and address legal risks.
5. Develop prudential, behavioral and supervisory requirements and apply them to all cryptocurrency market participants.
6. Establish a joint oversight system by various domestic agencies and authorities.
7. Build international cooperation to strengthen the supervision and enforcement of virtual currency regulations.
8. Monitor the impact of cryptocurrencies on the stability of the international monetary system.
9. Strengthen international cooperation to develop digital infrastructure and alternative solutions for cross-border payments and finance

Given the growing adoption of cryptocurrencies in some countries, the transnational nature of cryptocurrencies, and their growing ties to the existing financial system, the Board advocates a comprehensive and coherent approach. He expressed the view that there is a problem and that a coordinated response is necessary.

He also pointed out macroeconomic risks such as risks to the effectiveness of monetary policy, fluctuations in capital flows, and fiscal risks as risks posed by virtual currencies. There are also serious concerns about financial stability and soundness, legal risks, consumer protection and market integrity.

Against this background, the Board expressed its intention to approve the framework proposed in the paper.

Not recognized as legal tender

The Board stressed the importance of the IMF’s advice in this area, noting that the widespread adoption of cryptocurrencies could pose not only macroeconomic risks, but also significant long-term implications for the international monetary system. Emphasize sexuality. We evaluated the first policy action proposed in the paper as follows.

Board members “broadly agree” with the above views.

The IMF has continued to express concerns over El Salvador, the world’s first country to adopt Bitcoin as legal tender in 2021, and has urged it to revoke its legal tender status.

connection:IMF Urges El Salvador to Remove Bitcoin as Legal Tender

Most recently, in a research report on the financial situation of El Salvador, he argued that the introduction of “bitcoin bonds” that the country is preparing to issue should be reviewed.

connection:International Monetary Fund (IMF) Investigation Report “El Salvador Should Review the Introduction of Bitcoin Bonds”

Regulation of virtual currency

The Council noted that “a strict[cryptocurrency]ban is not the first option,” but that targeted regulation could apply where domestic policy goals and authorities are facing capacity constraints. Agreed that there is a possibility that However, it also became clear that there are some directors who are of the opinion that an outright ban should not be ruled out.

On the other hand, he pointed out that it is possible for governments to use the underlying technology of cryptocurrencies for public policy, as they should be careful not to impede innovation through regulation. It was agreed that the pace and sequence of framework implementation should be tailored to national circumstances.

The Council stressed the importance of promoting the principle of “same activities, same risks, same regulations”. Strong coordination between regulatory authorities, both domestically and internationally, is essential.

He also expressed his recognition that the role of the IMF is to act as a bridge between member countries’ realities and international standards and rule-setting processes through the dissemination of best practices. He also noted the importance of addressing significant data gaps and emphasized the important role of the IMF in monitoring risks and impacts on the international monetary system.