IMF: Cryptocurrencies are no longer a niche asset, and regulators need to reckon with this

Experts from the International Monetary Fund advocated for global regulation, calling for a cohesive and coordinated development of a regulatory framework for the crypto industry.

The International Monetary Fund (IMF) has released a new report in which IMF Director of Capital Markets Aditya Narain and Associate Director Marina Moretti say that digital currencies have evolved from niche products to a payment instrument, speculative investment and hedging instrument. . And this, according to experts, calls for a comprehensive and thorough regulation of the cryptocurrency industry.

The authors of the report emphasize that the recent bankruptcies and failures of crypto companies only reinforce this need. However, the development of a regulatory framework is hampered by the fact that the market is developing very quickly and constantly changing, and regulators lack practical skills in this area. In addition, constant monitoring of the market requires a lot of resources.

“Regulators are trying to find people and learn the necessary skills to catch up with the industry given the limited resources and many other factors. That being said, there are a number of different crypto actors – miners, validators, protocol developers – who are not easily covered by traditional financial regulation,” the report says.

A global regulatory framework can help resolve this situation by bringing order to markets and building consumer confidence, as well as setting limits and ensuring safety in the industry so that participants continue to develop useful innovations. Currently, the approach to regulation is very inconsistent - different regulators have different views on the situation on the market.

Earlier, IMF analysts urged central banks to use cryptocurrency innovations, as this could have a positive impact on the traditional monetary system, which needs to be improved.