The International Monetary Fund (IMF) and the Financial Stability Board (FSB) have joined forces to produce a new report which, as they put it, “provides guidance to policymakers on the appropriate scope and design of policy mitigation measures related to crypto assets”.
The report, which was published last week, provides advice on such policies, including their need to be “proportionate and carefully calibrated”. It also specifically advises against “total bans” on cryptocurrencies, citing potential benefits from their widespread use.
Commenting on the report, IMF Managing Director and Chairwoman Christine Lagarde noted: “Policymakers should seek to limit potential risks from crypto-assets, without discouraging innovation. The FSB and IMF have developed guidance to assist policymakers in this regard.”
The report also highlights the importance of ensuring global regulatory convergence in order to ensure effective regulation of crypto assets. Additionally, the report suggests that further work will need to be done around “monitoring market dynamics, closing regulatory gaps, and improving operational resilience of trading platforms”.
By acknowledging the potential risks posed by crypto assets but at the same time noting the need to take a proportionate approach to regulation, the report is a welcome development. It is clear that a blanket ban on crypto assets would be counterproductive, and such advice should help to inform a more fact-based approach to regulating the sector.