The IMF Urges Global Governments to Keep a Close Eye on Crypto

　　According to The Block, the International Monetary Fund (IMF) has recommended international decision-makers to keep a close eye on cryptocurrency in light of the growing worries raised by the conflict in Ukraine.

　　In its Global Financial Integrity Report, the IMF discussed the possible use of cryptocurrency in Russia's conflict against Ukraine, as well as the threat it poses to the stability of existing financial institutions.

　　According to the IMF, the global financial system has become more “cryptoized” as a result of Russia's invasion of Ukraine and the COVID-19 outbreak.

　　Although much of this is attributable to ordinary trade activity, the IMF warned that it might be used to evade identification checks in financial flows, basically providing a means of transacting anonymously overseas.

　　Despite the fact that regulators in the United States and the United Kingdom have advised crypto businesses to be cautious, persons may utilize non-compliant exchanges, mixers, or other techniques to avoid punishment.

　　To address crypto-specific risks, the IMF has advised international governments to implement Financial Action Task Force standards, which include a travel rule for crypto assets that requires exchanges to transmit sender and recipient identification information, as well as the implementation of additional laws and regulations on foreign exchange and capital flow management that cover crypto.

　　According to the report, “essential steps include developing a comprehensive, consistent, and coordinated regulatory approach to crypto assets and effectively applying it to capital flow management measures; establishing international collaborative implementation arrangements; addressing data gaps; and leveraging technology (”regtech“ and ”suptech).

　　The research also discussed the decentralized finance (DeFi) field. It referred to the sector as a new type of intermediary, which raises a new set of legal issues for regulators to address, most notably how to oversee an entity that lacks a centralized point of contact.

　　“Regulation should focus on elements of the crypto ecosystem that enable DeFi, such as stablecoin issuers and centralized exchanges,” the report suggested. “Authorities should also encourage DeFi platforms to be subject to robust governance schemes, including industry codes and self-regulatory organizations. These entities could provide an effective conduit for regulatory oversight.”

　　The IMF expressed worries about the risks associated with El Salvador's issue of bitcoin-backed bonds in a similar study released in January of this year.

　　According to Blockchain.News, the IMF has pushed El Salvador to withdraw bitcoin as legal tender as soon as possible.

　　The financial organization cited Bitcoin's extreme price fluctuation as a serious concern, stating that bitcoin should not be utilized as legal money, according to the report.

　　According to CNBC, after bilateral conversations between both sides, IMF officials stated that “there are considerable risks connected with the usage of bitcoin on financial stability, financial integrity, and consumer protection, as well as the accompanying fiscal contingent liabilities.”

　　El Salvador became the first country to embrace bitcoin as legal cash in June of last year, with 62 votes in favor out of 84. Bitcoin was officially accepted as legal money in this country in September.

　　As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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