Global financial regulators and the International Monetary Fund on Thursday set out a roadmap to coordinate measures that stop crypto assets from undermining macroeconomic and financial stability. Such risks are exacerbated by noncompliance with existing laws in some instances, the G20's risk watchdog, the Financial Stability Board, and the IMF said in a paper.
Many of the claimed benefits from crypto assets, such as
cheaper and faster cross-border payments, and increased financial inclusion,
have yet to materialise, it added.
"Widespread adoption of crypto-assets could undermine
the effectiveness of monetary policy, circumvent capital flow management
measures, exacerbate fiscal risks, divert resources available for financing the
real economy, and threaten global financial stability," the paper said.
The paper sets out timelines for members of the IMF and G20
to implement recent recommendations to regulate crypto from the Financial
Stability Board and IOSCO, a global group of securities regulators.
It marks a further evolution in regulatory thinking after
several years of seeing little threat from the sector, with attitudes hardening
after the collapse of the crypto exchange FTX last November, which rattled
markets and left investors nursing losses.
"A comprehensive policy and regulatory response for
crypto-assets is necessary to address the risks of crypto-assets to
macroeconomic and financial stability," said the paper, which will be
presented to G20 leaders at a summit this month in New Delhi.
The European Union has approved the world's first
comprehensive set of rules for crypto assets, but there is a patchier approach
elsewhere to a borderless sector where fraud and manipulation are
"prevalent".
Other elements include governments avoiding large deficits
which can lead to inflation that dents fiat currencies and encourages
substitutes such as cryptoassets, the paper said.
The tax treatment of crypto assets should also be spelled
out, along with how existing laws apply to the sector. © Reuters
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