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IMF warns that uncoordinated cryptocurrency regulation could foster destabilizing capital flows
The global regulatory framework must ensure a level playing field for the cryptocurrency market. The International Monetary Fund (IMF) announced this in its blog on its official website.
According to the organization, some emerging markets are facing “acute risks of currency substitution with cryptoassets.” These risks are prompting the creation of a coordinated approach to regulating cryptocurrencies, according to the IMF. In fact, the organization suggests starting with the following initiatives:
- Providers of “critical” cryptocurrency services must obtain a license to operate. Business that provides storage, transfer and settlement of cryptocurrencies falls under such regulation.
- Regulation of cryptocurrencies should be based on the rules for traditional finance. For example, investment services must have requirements similar to those of securities brokers and dealers.
- The authorities must provide clear requirements for regulated financial institutions regarding their exposure and interactions with cryptocurrency. For example, regulators should set capital and liquidity requirements for the cryptocurrency business.
However, not everyone in the cryptocurrency community shares the IMF’s view. For example, cryptocurrency exchange Coinbase previously urged regulators to create a different regulatory framework than the traditional one. The regulated crypto exchange argues that requirements developed back in the 1930s to facilitate oversight of the US financial system are failing in the current “technological revolution.”
The issue of cryptocurrency exchangers in Russia will be closed already in 2022. This was announced earlier by Deputy Director of Rosfinmonitoring Herman Neglyad. He noted that so far there are two ways on the issue of regulation: the inclusion of sites as subjects of anti-money laundering legislation with identification and the prohibition of activities.
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