The IMF and FSB are at the forefront of a crypto policy paper with several recommendations which they framed after requests from the G20 group of countries.
G20 and crypto have been trending subjects across the crypto industry in recent times. Experts have accorded special importance to the topic due to the looming issue of crypto regulation. The group of twenty countries has been deliberating for a common consensus for crypto regulation. With the G20’s request, two reputed organizations have prepared a crypto policy paper.
The International Monetary Fund (IMF) and the Financial Stability Board (FSB) have together published the paper. The document has also listed several suggestions for different aspects of crypto. The suggestions were viable for mitigating risks to crypto assets, stated the paper.
“Crypto-assets are purported to bring a wide range of benefits, including cheaper and faster cross-border payments, increased financial inclusion and greater portfolio diversification. Greater operational resilience, and increased transparency and traceability of transactions, are also often presented as potential benefits,” said the policy document.
It then went on to describe several policy measures that could prevent any risks emerging from crypto. The policy paper agreed a blanket ban on crypto would not be feasible. It said that cooperation on various issues and appropriate regulation was better than a complete ban.
The paper touched upon monetary stability and sovereignty in great detail. Its concerns of crypto threatening monetary stability were highlighted, but it also focused on targeted restrictions. It stressed regulation and a set of international standards that the industry could follow.
The FSB and IMF have meanwhile been working with other organizations in this aspect. They would work for a policy framework for crypto that would extend beyond the G20.
As far as crypto regulation was concerned, most countries were at different stages. The G20 summit of 2023, thus, has been an essential mover for a global crypto consensus. The US, for example, has varied opinions on crypto regulation from its senators. The SEC, a US regulator, has delayed the approvals for crypto ETFs, which hasn’t affected the market well.
Meanwhile, other regions like Hong Kong, Europe, and Japan have been active in drafting their own crypto regulations. Due to the favorable business climate, most crypto firms have flocked to these regions.
The Markets in Crypto-Assets Act in Europe has been the main trigger for coordinated crypto regulation across the EU. The UK also has a comprehensive crypto regulatory policy in the works. It has been a guiding factor for higher crypto adoption in the country.
Better regulatory policies across the world can also work as a positive factor for the crypto market. The market has returned more than 50% since the beginning of 2023. Crypto regulation, ETFs, and a better macroeconomic climate could work wonders for the market’s rally.