The emergence of cryptocurrencies and their increasing adoption impetus the need for crypto regulations. Issues like failures of projects, exploits, high market volatility, and misuse of digital assets in crimes have put the regulatory authorities on their toes worldwide.
After the U.S. Fed decided to fight market inflation with its hawkish approach, IMF called for a more comprehensive, consistent, and complete global regulatory policy for digital assets, per the report by IMF named ‘The right rules could provide a safe space for innovation.’
Deputy Director Aditya Narain and Assistant Director Marina Moretti from the IMF’s Monetary and Capital Markets Department published the report. Citing the complexity in regulating crypto assets and their technological nature and ever-changing needs, the authors said regulating digital currencies is a hard task and mentioned;
“Applying existing regulatory frameworks to crypto assets, or developing new ones, is challenging for several reasons. For a start, the crypto world is evolving rapidly. Regulators are struggling to acquire the talent and learn the skills to keep pace, given stretched resources and many other priorities. Monitoring crypto markets is difficult because data are patchy, and regulators find it tricky to keep tabs on thousands of actors who may not be subject to typical disclosure or reporting requirements.”
Moreover, highlighting the use cases of cryptocurrency in the mainstream, the authors pointed toward its importance as a cross-border payment medium, hedges against weak currencies, and speculative investment.
IMF further addressed one’s ability to privately issue products via cryptography, terminologies used for staking, and different regulatory frameworks for one type of product circulating across borders. The global authority suggested designing a comprehensive global policy for banks, securities, exchanges, wallets, and other actors involved.
Bitcoin’s price fell below even the $19,000 mark. | Source: BTCUSD price chart from TradingView.com
IMF Says Different Approaches Of Jurisdictions Causes Fragmentation
The process of harmonizing the global regulatory framework needs to be implied so the crypto businesses can manage to move from one jurisdiction to another and continue the business, the article reads. As per the needs, a comprehensive and coordinated approach will help prevent fragmentation created due to regulators’ different frameworks. For example, some keep users’ safety first priority while other financial goals.
The IMF expressed its views on how global authorities have been working hard to achieve proper and efficient regulations to protect users. However, few are done with introducing an advanced regulatory framework like Switzerland and Japan, and others, such as the United Arab Emirates and European Unions, are in the drafting stage.
But unfortunately, authorities have designed the regulation rules with different strategies, as some ban the issuance of crypto or hold it with others making national-level developments on crypto. Similarly, varying states’ opinions have resulted in a “fragmented global response neither assures a level playing field nor guards against a race to the bottom.”
Related Reading: KyberSwap’s Discover Feature Helps Traders Spot Opportunities
The article reads;
“The regulatory fabric is being woven, and a pattern is expected to emerge. But the worry is that the longer this takes, the more national authorities will get locked into differing regulatory frameworks. This is why the IMF is calling for a global response that is (1) coordinated, so it can fill the regulatory gaps that arise from inherently cross-sector and cross-border issuance and ensure a level playing field; (2) consistent, so it aligns with mainstream regulatory approaches across the activity and risk spectrum; and (3) comprehensive, so it covers all actors and all aspects of the crypto ecosystem.”
Featured image from Pixabay and chart from TradingView.com
In Singapore, LBank, a major cryptocurrency exchange, participated in Token 2049 as a sponsor and exhibitor. At the Token 2049 venue, LBank was welcomed with open arms and went on to host a prosperous after-party. Singapore, one of the burgeoning major crypto hubs, welcomed a diverse crowd of enthusiasts and provided LBank with a beautiful […]
Back at the beginning of the year, some notable celebrities had been named in a lawsuit over the alleged Ethereum Max (EMAX) scam. These celebrities included reality star Kim Kardashian, boxing legend Floyd Mayweather, as well as former professional athletes Paul Pierce and Antonio Brown. The class action lawsuit had accused the celebrities of pumping […]
Ever since losing around 80% of its value from its all-time high, Bitcoin has been questioned as a store of value and a digital equal to gold. The digital currency still records the best performance for any asset across the last decade, but critics are fast to point out past year’s losses. Related Reading: Crypto […]
Bitcoin (BTC) accumulation is seeing a massive surge as it rises to levels last seen in 2015.
Analysts now view NFTs as Solana’s strong suit amid a wave of adverse reports surrounding the network.
The trading volume of the non-fungible token (NFT) market of the Ethereum ecosystem dipped dramatically during the just-ended third quarter of 2022, pointing to lingering market pain. According to a report by blockchain and crypto analytics platform Messari, Ethereum NFT transactions fell 17% over the quarter to an average of 181,000 transactions per day. This […]