The International Monetary Fund (IMF) has recently released a nine-point plan for countries to consider when creating policies around cryptocurrencies. This comes in response to calls for crypto regulation across the globe.
The IMF urges countries to create policies that protect monetary sovereignty and stability.
The IMF executive board discussed a paper titled “Elements of Effective Policies for Crypto Assets,” which provides guidance to member countries on key elements of an appropriate policy response to crypto assets.
Investors King could recall that the IMF had hit out at El Salvador in late 2021 when the central American country became the first to adopt Bitcoin as legal tender, a move since copied by the Central African Republic.
The Fund however added that an outright ban on cryptocurrency should not be an option, noting that cryptocurrencies hold some valuable potential that could revolutionise financial technology.
The IMF recommendations have faced criticism for not taking a holistic view of the benefits and potentials of cryptocurrencies.
Members of the crypto community are concerned that the IMF wants greater control over crypto and may even impose a ban due to fears of it destabilizing the global monetary system or bypassing it altogether.
Additionally, some worry that the IMF’s policies could stifle innovation in the crypto space and create barriers for new and smaller players to enter the market.
Critics also note that the paper fails to adequately address issues related to the adoption of crypto assets by developing countries, which represents a missed opportunity to promote financial inclusion in these regions.
Investors King acknowledges that the IMF recommendation is not mandatory for member states to follow. Nonetheless, it may significantly influence the ongoing discourse surrounding the adoption of cryptocurrencies in the coming weeks or months.