Amid the rise of regulator crackdown on the crypto industry, the way each regulator views the industry has proved to be distinct. While some are keen on an actual crackdown, some believe that with regulation, the industry could be so much better.
While the International Monetary Fund’s (IMF) opinion on the industry might not be the former, it is also not that far away from the latter. On Sunday, IMF managing director Kristalina Georgieva in an interview with Bloomberg expressed the organization’s stance on the cryptocurrency market.
Crypto Ban Should Not Be Taken Off The Table
In the interview, Georgieva noted the IMF is firmly behind the idea of regulating the crypto market. She stated, “We are very much in favor of regulating the world of digital money.” Adding that this objective is a top priority for both the Financial Stability Board (FSB), the IMF, and the Bank for International Settlements.
However, after saying that, Georgieva went ahead to make another statement indicating that though the IMF may be interested in digital assets, they can be strict with the rules. Georgieva noted, “If the regulation is slow to come and crypto assets become a higher risk for consumers and potential for financial stability, the option of banning it (cryptocurrencies) should not be taken off the table.”
Georgieva further reflected on countries such as India where the options of banning crypto assets in the region have been explored. Furthermore, Georgieva stated if there could be greater predictability for consumer protection that assures it [the crypto industry] is the best place to be, then the measures for banning cryptocurrency may be avoided “but we are not in that world,” she added.
When the interviewer asked the IMF chief what would take for regulators to indefinitely ban cryptocurrency is it another incident such as the FTX crash, Georgieva replied that it could be the industry leaders’ inability to protect consumers from the rapidly evolving crypto industry.
Cryptocurrencies Have “No Definition Of Money”
Notably, the IMF chief did not stop there and further said cryptocurrencies and stablecoins need to be differentiated from the central bank digital cryptocurrencies (CBDC) backed by the states as there have been several confusions.
Stablecoins are stable assets backed by a real-world currency which gives them a certain amount of “reliability” that makes them “reasonably good for the economy” as opposed to volatile cryptos that are not backed and are therefore speculative and high-risk investments, according to Georgieva.
Georgieva noted stablecoins are yet to be legal tender and are still considered a risky investment, therefore putting a ban on them should not be taken off the table entirely. She further reflected on a recently released paper noting, “crypto assets can not be considered legal tenders as they don’t have the definition of money.”
Meanwhile, the crypto market has so far been holding up more than expected despite several regulators’ intent on the industry. The global crypto market cap still stands firmly above $1 trillion while top assets such as Bitcoin and Ethereum have been in green over the past 24 hours.
At the time of writing, Bitcoin currently trades at $23,741, up 2.3% in the last day and looking to reclaim its previous position ranging above the $24,000 mark.
In contrast, Ethereum is up 3.4% in the last 24 hours with a current trading price of $1,656 looking to reclaim its former $1,700 mark.