The International Monetary Fund (IMF) has restated its call for cryptocurrency regulation in certain countries but emphasized that an outright ban may not be the most effective approach.
In a report on Latin America and the Caribbean published on June 22, the IMF highlighted different approaches taken by local governments regarding the adoption of cryptocurrencies and central bank digital currencies (CBDCs).
El Salvador, where Bitcoin has been accepted as legal tender since September 2021, and the Bahamas, which launched its own CBDC called the Sand Dollar in October 2020, were cited as examples.
The IMF noted that countries like Brazil, Argentina, Colombia, and Ecuador, where crypto regulation is still in progress, rank among the highest in the world for crypto adoption. These countries aim to address issues such as financial inclusion, faster and cheaper payments, and other benefits associated with digital assets. Furthermore, the IMF mentioned that most central banks in the region are either considering or have already adopted digital currencies.
The IMF stated that well-designed CBDCs can enhance payment system usability, resilience, efficiency, and financial inclusion in Latin America and the Caribbean.
While some countries have chosen to ban crypto assets due to perceived risks, the IMF believes this approach may not be effective in the long term. Instead, the focus should be on addressing the underlying factors driving crypto demand, such as unmet digital payment needs, and improving transparency by recording crypto asset transactions in national statistics.
The IMF has consistently expressed its opposition to countries adopting cryptocurrencies as legal tender. Recently, on June 19, Tobias Adrian, the director of the IMF’s monetary and capital markets department, proposed a payment system using a single ledger to record CBDC transactions, which received criticism from the crypto community.
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