A joint report recently issued by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) has warned against blanket bans on cryptocurrencies.
The report recommends that authorities should, instead, focus on creating an appropriate regulatory framework that takes into account both the benefits and risks of digital coins. The report focuses on areas such as anti-money laundering and counter terrorist financing measures, consumer protection, taxation and cyber security.
The report recommends that countries should identify and evaluate the financial stability risks and the potential macro-economic implications of digital assets. Countries are also being urged to have conversations with cryptocurrency-related businesses, in order to assess their potential implications on financial stability.
The report suggests that, should authorities decide to implement rules in the area of digital assets, they should do so in such a way that provides flexibility, while leaving room for innovation to flourish.
The report suggests that authorities could also use other tools, in addition to regulation, in order to address the risks associated with digital assets. These tools could include coordination across multiple jurisdictions, coordination among private sector participants, encouraged standards and codes of conduct, as well as educational initiatives.
The report cautions that blanket bans may not be the most effective approach in responding to the potential risks associated with digital coins, and that instead regulators should focus customization of regulatory measures, taking into account the specifics of each jurisdiction.