IMF reiterates call for crypto regulation after the ecosystem's 'rough year'

The International Monetary Fund, oregon IMF, has pointed to the illness of FTX arsenic good arsenic “turmoil” successful the banking assemblage successful its calls for regularisation of integer assets.

In its Global Financial Stability Report released connected April 11, the IMF renewed calls for “comprehensive and accordant regularisation and capable supervision” pursuing the failures of cryptocurrency firms including FTX arsenic good arsenic the consequent illness of crypto-friendly banks, including Silicon Valley Bank and Signature Bank. According to the fiscal agency, regularisation for entities successful the crypto plus ecosystem — with “strict prudential requirements” for stablecoin issuers — should see the storage, transfer, exchange, and custody of reserves for integer assets.

“[Silicon Valley Bank]’s spillover from the halfway fiscal assemblage reverberated crossed the crypto ecosystem and fiscal institutions exposed to it,” said the report. “Its nonaccomplishment resulted successful a depegging of 2 stablecoins (Circle USDC and Dai), which held uninsured deposits successful the bank, arsenic good arsenic the demise of Signature Bank of New York due to the fact that investors became acrophobic astir its footprint successful the crypto sector. These events adhd to questions astir the viability of integer assets and reenforce the request for due regulation.”

Clear connection by cardinal banks is captious to minimize economical and fiscal uncertainty, and utilizing abstracted tools to execute monetary argumentation and fiscal stableness goals tin code aggregate challenges astatine once. https://t.co/FbiSNdCpVd #GFSR #IMFpublications pic.twitter.com/rCBJQEyi6Y

The study cited a “rough twelvemonth for crypto” successful 2022, pointing to the illness of the FTX speech — not the failures of Terraform Labs, Celsius Network, oregon others which preceded the firm’s bankruptcy filing — arsenic an lawsuit which “created important contagion” successful the ecosystem. However, the IMF reported that the interaction extracurricular of the crypto abstraction owed to these collapses was mostly “limited.”

Criticism of cryptocurrencies and integer assets is thing caller for the IMF. In February, the agency’s enforcement committee endorsed a argumentation framework that did not see recognizing crypto arsenic ineligible tender. However, members person reportedly leaned towards regulating integer assets alternatively than outright banning them.

Related: IMF examines CBDC plan successful discourse of Islamic banking, finds immoderate risks magnified

The planetary monitoring assemblage Financial Stability Board plans to publish its ain recommendations for regulatory and supervisory approaches to crypto assets and stablecoins successful July 2023. The G20 besides reported successful February that the committee would beryllium releasing “a synthesis insubstantial integrating the macroeconomic and regulatory perspectives of crypto assets” successful coordination with the IMF successful September.

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