IMF Chief Recommends not to ban crypto but instead, we should regulate it because of the practical difficulties of the latter so let’s find out more in today’s crypto news.
The IMF Chief Gita Gopinath said that developing economies should not ban crypto but she called for global regulation of the industry. Gopinath outlined there are regulatory difficulties around crypto at an event at the National Council of Applied Economics Research and said that the global policy on crypto is quite urgent and has to address all challenges that the technology poses to the emerging markets. What’s more to it she said banning them was impractical because of the global presence that exchanges possess:
“Regulating crypto assets and currencies are essential, especially for emerging and developing economies, as banning them may not work as crypto exchanges are located offshore, which makes it easier for an individual to trade in them despite the ban.”
Back in September, China announced a ban on crypto exchanges after which it saw exchanges such as Biki and Bitmart fleeing the country while India is still discussing a potential ban. Gopinath outlined that we need a global policy around crypto as cross-border transactions are making the nation’s regulations against it very weak. They can be used to evade the exchange rate controls, capital flow measures, and capital controls. Michael Saylor, the CEO of MicroStrategy as the world’s biggest bitcoin owner, outlined that this is extremely helpful from a business perspective but unlike real estate, BTC can be transferred across borders with the speed of light to tax-friendly jurisdictions.
Christine Lagarde, the President of the European Central Bank pushed for global crypto regulation to combat the decentralized money laundering capabilities. Besides China and India, other jurisdictions ruled out banning crypto and took a regulatory approach. Most US officials see China’s ban as an excellent opportunity to welcome the industry and capitalize on the innovation including Hester Peirce, Ted Cruz, and Pat Toomey. Singapore chose not to ban as well while the MAS director Ravi Menon thinks that crypto will lead to a good outcome for the economy and society and will work on a regulatory framework for it to operate with.