© Reuters. FILE PHOTO: Representations of the cryptocurrencies Bitcoin, Ethereum and DogeCoin are placed on a PC motherboard in this illustration taken June 29, 2021. REUTERS/Dado Ruvic/File Photo
by Marc Jones
LONDON (Reuters) – The International Monetary Fund has laid out a nine-point action plan on how countries should treat crypto assets, with point number one being a call not to grant cryptocurrencies like bitcoin currency status. legal.
The global lender of last resort said its Executive Board had discussed a document, “Elements of Effective Policy for Crypto Assets,” which provided “guidance to IMF member countries on key elements of an appropriate policy response to crypto assets.”
Such efforts have become a priority for authorities, the fund said, following the collapse of a number of crypto exchanges and assets in recent years, adding that doing nothing now was “unsustainable.”
The main recommendation was to “safeguard sovereignty and monetary stability by strengthening monetary policy frameworks and not grant crypto assets official currency or legal tender status.”
The IMF had hit El Salvador in late 2021 when the Central American country became the first to adopt bitcoin as legal tender, a move that has since been copied by the Central African Republic.
Other tips on Thursday’s list, which comes as G20 decision makers meet in India, included protecting against excessive capital flows, adopting unambiguous tax laws and rules on crypto assets, and developing and enforcing supervision requirements for all crypto market players.
Countries should also establish international agreements to improve supervision and enforce regulations, the IMF added, as well as establish ways to monitor the impact of cryptocurrencies on the stability of the global monetary system.
Describing its Executive Board’s assessment, the IMF said that the directors welcomed the proposals, agreeing that widespread adoption of crypto assets “could undermine the effectiveness of monetary policy, circumvent capital flow management measures, and exacerbate financial problems.” fiscal risks”.
They also “generally agreed” that crypto assets should not be given official currency or legal tender status, and while strict asset bans are “not the best option,” some directors thought they shouldn’t be ruled out.