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IMF chief economist opposes banning cryptocurrencies, instead she wants the sector regulated

IMF chief economist opposes banning cryptocurrencies, instead she wants the sector regulated

Gita Gopinath, chief economist at the International Monetary Fund (IMF), spoke out against a blanket ban on cryptocurrencies, instead wanting the sector to be regulated. Gopinath, however, called for immediate adoption of a standard global policy to regulate digital assets, saying they pose a problem for emerging markets, Finbold reported.

According to the executive, who spoke at an event hosted by the National Council for Applied Economic Research (NCAER), the cryptocurrency sector has various advantages, such as decentralized technology, so regulation is necessary. “Regulation of cryptoassets and currencies is necessary, especially for emerging and developing economies, because banning them may not work because crypto exchanges are located offshore, making it easier to trade them despite the ban” –Gopinath said. She added that no single country can enact comprehensive regulation, but the complex nature of cryptocurrencies requires global cooperation, which should be urgent. Cryptocurrencies require a review of most laws, especially those related to foreign transactions, according to the official, who will take over as first deputy managing director of the IMF on Jan. 21, 2022. Her words came after the IMF released guidance on a proposed framework to standardize global regulation of cryptocurrencies. The IMF said that global regulation of cryptocurrencies should aim to create a level playing field for all parties. One suggestion is that regulation should be consistent with the primary use of cryptocurrencies along with stable coins. Amid the rise of cryptocurrencies, the IMF remains skeptical, noting that digital assets pose a threat to global financial stability. According to the agency, authorities should protect investors in the growing crypto sector.

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