Joint IMF and FSB Report Warns Against Total Crypto Bans
A joint report issued by the International Monetary Fund (IMF) and Financial Stability Board (FSB) has warned against the total banning of digital currencies such as Bitcoin.
The report, issued on July 20, states that wholesale bans on financial and payment service providers from dealing with crypto-assets would “create impediments” to cross-border payments.
The report draws attention to the fact that digital currencies can provide economic benefits and “may lead to new financial services and increase competitiveness of existing services”.
It also states that while digital currencies do pose certain risks, regulators should take a “balanced approach” in order to safeguard financial stability and consumer protection, while at the same time allowing for innovation and growth.
The report concludes by highlighting the potential for digital currencies to be a “useful tool” in financial inclusion and recommends that jurisdictions take a “case-by-case” approach in enacting regulations.
The IMF and FSB report serves as an important reminder that crypto-assets should be subject to the same regulations as other financial assets, and not be written off with an outright ban. It calls for a more balanced approach to regulation that will allow for both consumer protection and the development of new financial services.