The International Monetary Fund (IMF) has advocated denying the legal tender status of cryptocurrencies. This is the first in a nine-point list of fund recommendations on how countries should deal with cybercurrencies such as bitcoin. A status like that of official coins is therefore not planned.
The IMF announced on Friday evening that the board had discussed a corresponding report. This presents key elements for a political response to cryptocurrencies. After the collapse of crypto exchanges and assets in recent years, this is a priority for authorities.
The first recommendation in the report, according to the IMF, is that crypto assets should not be given “official currency or legal tender status.” It is important to protect the sovereignty and stability of monetary policy by strengthening the relevant frameworks. The IMF had criticized El Salvador in late 2021 when the Central American country allowed Bitcoin as legal tender. The Central African Republic later followed this step.
Other recommendations on the list include protecting against excessive capital flows, establishing clear cryptocurrency tax rules and laws, and developing and implementing regulatory requirements for crypto market players. Countries should also enter into international agreements to strengthen oversight and enforce regulation. In addition, ways must be found to monitor the impact of cryptocurrencies on the stability of the financial system.
Ban not ruled out
The IMF directors welcomed the proposals, the fund said. They agreed that widespread adoption of cryptocurrencies could undermine the effectiveness of monetary policy. Measures to control capital flows could then be circumvented and tax risks could increase. There was also general agreement that cryptocurrencies should not be given official currency or legal tender status. Although a strict asset ban was “not the first option”, some directors felt that it should not be ruled out.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
