Banning Crypto Isn't Ideal, But Shouldn't Be Ruled Out - 24/7 Wall St.

Banning Crypto Isn’t Ideal, But Shouldn’t Be Ruled Out – 24/7 Wall St.


On February 23, the IMF’s Executive Board released the findings on the organization’s recent “Elements of Effective Policies for Crypto Assets.” paper. According the publicationthe executives note that “the supposed potential benefits of crypto assets have not yet materialized” and believe that a ban on digital assets should not be ruled out although it is not ideal.

IMF Board Issues Statement on Crypto, Ban Not Out of the Question

In a document released on Thursday, IMF leaders outlined their position on the international regulation of digital assets. The board believes that the already current levels of adoption of digital assets already pose significant risks, while a significant increase in crypto adoption could seriously affect global financial stability and policy effectiveness monetary.

While the statement said executives generally don’t believe a full ban on digital assets is the ideal way forward, they see targeted restrictions as a viable form of industry regulation. However, it is important to note that some members remain adamant that an outright ban should not be ruled out.

Additionally, the report states that “although the supposed potential benefits of crypto assets have yet to materialize, significant risks have emerged.” Despite these findings, the document ultimately does little more than express that executives are broadly in agreement that the digital asset industry needs “a comprehensive, cohesive and coordinated response.”

Is there a consensus among major financial institutions?

A series of recent reports published by various financial institutions, national and international, seem to show a consensus within the great organization. Generally, the Reserve Bank of India, the Bank for International Settlements, the Fed and the IMF have all identified cryptocurrencies as an emerging sector that can pose a major risk to stability.

Reports have also been reluctant to offer outright bans and have generally been receptive to the further development of digital assets, highlighting the need to encourage innovation. However, all institutions have indicated their willingness to keep a possible cryptocurrency ban under review and have issued warnings to individuals and organizations, such as the recent warning for banks issued by a set of US agencies. In addition, many publications have identified an increased need for comprehensive regulation – with India, for example, designate digital assets as a top priority for his presidency of the G20.

Additionally, most of these assessments have indicated that the series of calamities that have rocked the digital asset industry, such as the collapse of FTX— remained confined there due to limited integration. However, they also noted increasing levels of adoption among both individual investors and traditional institutions, as evidenced by a series of cryptocurrency-related trademark filings and the recent statement by BNY Mellon CEO Robin VInce, according to which digital assets are the bank’s ‘longer-term game’.

This article originally appeared on The Tokist

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