The International Monetary Fund (IMF) has expressed its preference for regulating crypto assets instead of an outright ban.
However, the organization emphasized that the option of a ban would remain on the table for the time being. IMF Managing Director Kristalina Georgieva stated that regulating the world of digital money is a top priority for the agency.
In an interview with Bloomberg published on February 27, Georgieva responded to questions on her recent comments regarding a potential complete ban on cryptocurrencies. She explained that there is still much confusion around the classification of digital money.
Georgieva clarified that the IMF’s first objective is to differentiate between central bank digital currencies, publicly issued crypto assets, and stablecoins that are fully backed by reserves.
Georgieva noted that non-backed crypto assets are speculative, high risk, and not money, while fully-backed stablecoins create a “reasonably good space for the economy.”
She cited a recent paper recommending global regulation standards and emphasized that crypto assets cannot be legal tender because they are not backed.
The IMF Managing Director warned that the option to ban cryptocurrencies “should not be taken off the table” if they begin to pose a greater risk to financial stability.
However, Georgieva emphasized that good regulations, predictability, and consumer protection would be a better option, and banning would not need to be considered.
Georgieva added that an inability to protect consumers from the rapidly evolving world of crypto assets would be the primary catalyst for the decision to ban crypto.
The IMF’s preference is to differentiate and regulate crypto assets, which is in line with its goal of promoting global financial stability and sustainable economic growth.