IMF and FSB: Total crypto ban ineffective policy.

Yamini003

The International Monetary Fund (IMF) and the Financial Stability Board (FSB) jointly released a document on September 7th, providing recommendations for the cryptocurrency policies and regulatory paths of various countries. They emphasized that a ""comprehensive ban on cryptocurrencies"" is neither a good policy nor an effective deterrent against risks.

This policy document was commissioned by the G20 and combines the standards set by the IMF, FSB, and other international standard-setters for the cryptocurrency industry. It is expected to be formally submitted to the G20 this weekend as the basis for global cryptocurrency regulatory rules.

The report suggests that to address the overall economic risks posed by cryptocurrencies, a more reasonable approach is to establish a more robust overall economic policy, create a more trustworthy institutional framework for cryptocurrencies, and implement more effective regulatory oversight. Implementing a comprehensive ban on cryptocurrencies may not be helpful in mitigating related risks.

The report goes on to mention that implementing a comprehensive ban would mean treating all cryptocurrency activities (including trading and mining) as illegal, which would not only be costly but also challenging to enforce. It could even lead to cryptocurrency-related activities moving to other countries, thereby creating spill-over risks.

However, this does not mean that all bans should be ruled out. The IMF and FSB stated that if better solutions have not been found, governments may also consider targeted temporary restrictions to manage certain risk factors. For example, Dubai has implemented restrictions on privacy tokens as a measure to address specific risks.