The International Monetary Fund (IMF) has released a proposed framework aimed at making the global cryptocurrency regulatory approach functional on a worldwide level.
In a blog post, the IMF stressed that the global crypto regulations should strive to offer a level playing field for all parties. According to the agency, the framework should compel crypto-asset service providers to be fully licensed by relevant agencies.
The IMF notes that the licensing of such entities should be clear and comprehensive by offering designated roles.
Additionally, the IMF indicated that the regulations should align with the primary use of cryptocurrencies alongside stablecoins. According to the IMF:
“For example, services and products for investments should have requirements similar to those of securities brokers and dealers, overseen by the securities regulator. Services and products for payments should have requirements similar to those of bank deposits, overseen by the central bank or the payments oversight authority.”
Lastly, the IMF has called for the provision of guidelines by relevant authorities on regulated financial institutions in relation to their exposure to and engagement with digital assets.
For instance, the IMF noted that if banks resolve to offer custody services, regulations should require such institutions to outline the arising risks.
Destabilization of cash flow
According to the IMF, for a uniform crypto regulation framework, there is a need for cross-border collaboration to address the emerging challenges in the cryptocurrency space. The IMF also warned that uncoordinated global regulatory measures might destabilize cash flows.
“Crypto’s cross-sector and cross-border remit limits the effectiveness of national approaches. Countries are taking very different strategies, and existing laws and regulations may not allow for national approaches that comprehensively cover all elements of these assets,” IMF added.
However, the agency acknowledged that setting up uniform regulations is challenging, but concerned parties should start working on a framework immediately as the sector grows.
At the same time, IMF stressed that as agencies enact regulations, they should strive to protect the innovative aspect related to cryptocurrencies.