Sunday , 18 February 2018

IMF calls for international cooperation on cryptocurrency regulation

The International Monetary Fund (IMF), an organization of the United Nations that aims to foster global monetary cooperation and financial stability, has called for global coordination on cryptocurrencies, warning of the risks of surging cryptocurrency prices. Speaking on behalf of the IMF, spokesman Gerry Rice weighed in on the benefits of cryptocurrencies in their use as payments as well as their abuse in money laundering, fraud and terrorist financing.

Speaking to reporters in Washington, Rice added in quotes reported by Bloomberg:

“When asset prices go up quickly, risks can accumulate, particularly if market participants are borrowing money to buy. It’s important for people to be aware of the risks and take the necessary risk-management measures.”

Rice did not delve into specifics of the kind of collaboration or policies that the IMF is pushing for. The organization, which was established near the end of the second World War to reconstruct the international monetary and payments system, now functions as a fund that bails out countries embroiled in economic crises.

As a traditional financial heavyweight that continues to wield influence, the IMF has been known to taking a nuanced approach when discussing cryptocurrencies, particularly in their utility as an instrument for financial inclusion in developing or under-developed countries.

Nearly a year ago to the day, IMF managing director Christine Lagarde presented a report titled “Virtual Currencies and Beyond: Initial Considerations” at the World Economic Forum. With broad insights and research into cryptocurrencies like bitcoin, ‘virtual currencies and their underlying technologies can provide faster and cheaper financial services and can become a powerful tool for deepening financial inclusion in the developing world,’ read an excerpt from the report read by Lagarde.

She added that cryptocurrencies would bring “massive disruptions” and warned that central banks and financial services need to pay closer attention to the technology.

The IMF’s call for global cooperation on regulation of cryptocurrencies comes at a time when US Treasury Secretary Steven Mnuchin confirmed last week the existence of several internal working groups looking into the usage of cryptocurrencies like bitcoin to track their abuse in illicit actives.

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