IMF Economists Say Countries Should Address Crypto Demand Drivers Instead of Banning

The International Monetary Fund’s (IMF) economists person cautioned that banning cryptocurrency “may not beryllium effectual successful the agelong run.” Instead of outlawing crypto, they suggest countries should code “the drivers of crypto demand, including citizens’ unmet integer outgo needs.”

IMF Economists connected Crypto Adoption, Banning, and Regulation

The International Monetary Fund (IMF) published an nonfiction titled “Interest successful Central Bank Digital Currencies Picks Up successful Latin America and the Caribbean While Crypto Use Varies” connected Thursday. The nonfiction is authored by IMF elder economist Rina Bhattacharya, economist Dmitry Vasilyev, and Mauricio Villafuerte, a part main successful the IMF’s Western Hemisphere Department.

The IMF economists highlighted that 4 Latin American countries (Brazil, Argentina, Colombia, and Ecuador) ranked among the apical 20 countries globally successful presumption of crypto adoption according to Chainalysis. However, they stressed:

Crypto plus adoption besides presents galore challenges and risks, peculiarly for susceptible LAC [Latin America and the Caribbean] countries with a past of macroeconomic instability, debased organization credibility, important superior flows, corruption, and extended informal sectors.

The economists explained that crypto regulations alteration crossed Latin America and the Caribbean countries. While noting that El Salvador has made bitcoin ineligible tender, they pointed out: “Other countries similar Argentina and the Dominican Republic person prohibited the usage of crypto assets owed to concerns astir their interaction connected fiscal stability, currency and plus substitution, taxation evasion, corruption, and wealth laundering.”

Noting that “Crypto assets contiguous risks that alteration by state circumstances,” the economists concluded:

While a fewer countries person wholly banned crypto assets fixed their risks, this attack whitethorn not beryllium effectual successful the agelong run. The portion should alternatively absorption connected addressing the drivers of crypto demand, including citizens’ unmet integer outgo needs, and connected improving transparency, by signaling crypto plus transactions successful nationalist statistics.

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