Key Takeaways:
- IMF does not see crypto ban as the best option, but it is not out of the picture.
- Monetary Fund executives see CBDCs as a better option.
- US lawmakers don't hurry to set a regulatory framework.
YEREVAN (CoinChapter.com) — International Monetary Fund (IMF) is playing a dirty gangsta game with the crypto sector as the latter continues to enjoy booming adoption even during a bear cycle.
IMF Proposes Crypto Ban
Speaking on the sidelines of the G20 finance ministers meetings in Bengaluru, India, on Feb 22-27, IMF Managing Director Kristalina Georgieva explained how the United Nations financial agency views digital assets and what it would like to see in terms of regulation.
She asserted that a regulatory framework is a top priority and that the IMF is “very much in favor of regulating the world of digital money.” However, the Monetary Fund also said that growing crypto adoption “could undermine the effectiveness of the monetary policy, circumvent capital flow management measures, and exacerbate fiscal risks.”
Moreover, the IMF Executive Board stated that while outright banning cryptocurrency assets “is not ideal,” such action should still be considered. Georgieva also stated that Central Bank Digital Currencies (CBDCs) might be the right way forward.
During an interview with Bloomberg published on Feb 27, the IMF Managing Director commented on the potential cryptocurrency ban. She said there was still much confusion around the classification of digital money.
Our first objective is to differentiate between central bank digital currencies that are backed by the state and publically issued crypto assets and stablecoins.
said Georgieva.
She added that fully-backed stablecoins create a “reasonably good space for the economy,” but non-backed crypto assets are speculative, high risk, and not money.
Meanwhile, the U.S. Treasury Secretary and former Fed Chair Janet Yellen asserted that the US lawmakers do not intend to ban crypto.
“We haven’t suggested outright banning of crypto activities, but it is critical to put in place a strong regulatory framework. We’re working with other governments.”
— said the official.
In detail, crypto regulation has been an eyesore of the fiat economy for years, as US lawmakers regulate by enforcement without setting the mentioned regulatory framework.
US lawmakers undecisive
Charlie Munger, the vice chairman of Berkshire Hathaway, thinks that a blanket crypto ban is a way to go. The mogul noted that the crypto sector could be best characterized as a “gambling contract with a nearly 100% edge for the house.”
He also commented that “the communist government of China recently banned cryptocurrencies because it wisely concluded that they would provide more harm than benefit.”
What should the U.S. do after a ban of cryptocurrencies is in place? Well, one more action might make sense: Thank the Chinese communist leader for his splendid example of uncommon sense.
said Munger.
Also read: European Central Bank and Bank of England’s Anti-Inflation Measures Risk Recession Havoc.
NFT Ape author Adam McBride took Munger’s comment as a threat, noting that non-custodial wallets are the way to financial freedom. “The battle lines are being drawn. Freedom or tyranny. Non-custodial wallets are the hill we can’t surrender,” he said.
US No Longer a Crypto Epicenter
As reported on Feb 17, Interactive Brokers, one of the biggest stock trading platforms, is launching Bitcoin (BTC) and Ethereum (ETH) trading in Hong Kong.
Moreover, Hong Kong’s Financial Secretary, Paul Chan, said last month at a conference on Web3 that he counts on the region becoming a Web3 hub. “We are confident that Hong Kong will soon develop a thriving virtual asset ecosystem,” he noted.
Additionally, Hong Kong, as a semi-autonomous region, has passed a new crypto law that some crypto insiders say is aimed at opening up retail trading starting Jun 1.
Also read: FOMC meeting minutes released – what to expect from Bitcoin?
Meanwhile, Brian Armstrong, the chief of the largest crypto exchange in the US – Coinbase, stated that China’s move towards a regulatory framework could undermine the US. The CEO bashed the Securities and Exchange Commission for losing face amid the international competition for the status of a financial hub.
America risks losing its status as a financial hub long term, with no clear regulations on crypto and a hostile environment from regulators. Congress should act soon to pass clear legislation. Crypto is open to everyone in the world, and others are leading. The EU, the UK, and now HK.
he said in a recent tweet.
A financial reporter from China, Colin Wu, clarified the translation issues, noting that Hong Kong’s possible crypto-friendly announcement is not all rainbows and sunshine.
It actually means that the region will also start to fully comply with regulations, such as requiring exchanges to operate with licenses, reviewing the types of coins listed, and prohibiting cryptocurrency advertisements. Although Hong Kong is promoting web3, it will be even stricter than the United States at that time.
said Wu.
