• IMF Managing Director Kristalina Georgieva is seeking more regulations on private cryptocurrencies.
• The IMF does not want to ban digital assets outright, but seeks to differentiate and regulate them in order to protect consumers.
• El Salvador may have made Bitcoin a legal tender, but Georgieva stated that cryptocurrencies can not be legal tender as they are not backed.
IMF Seeking Regulations on Private Cryptocurrencies
The International Monetary Fund (IMF) Managing Director Kristalina Georgieva is seeking more regulations on private cryptocurrencies. She revealed this while speaking at the sidelines of the G20 finance ministers‘ meetings in Bengaluru, India. She clarified that the IMF does not wish for an outright ban on digital assets, but rather to differentiate and regulate them in order to protect consumers.
Cryptocurrency Not Suitable as Legal Tender
El Salvador made history when it became the first country to make Bitcoin a legal tender back in June 2021. However, Georgieva noted that cryptocurrencies cannot be considered legal tender as they are not backed by the state and publically issued crypto assets or stablecoins.
Differentiate Between Crypto Assets
Georgieva went on to explain how the United Nations financial agency currently looks at digital assets and what it intends to achieve in terms of regulation: “We are very much in favour of regulating the world of digital money. And this is a top priority.“ She highlighted that fully-backed stablecoins create a reasonably good space for the cryptocurrency economy whereas non-backed crypto assets are speculative, high risk, and not money.
Risk of Outright Ban
In response to questions about her recent statement regarding a potential complete ban on cryptocurrencies, Georgieva said that is unlikely to happen at the moment due to confusion around their classification as digital money. However, she did point out that banning crypto assets should still be an option if they begin posing greater risks than benefits for global markets and investors alike.
Overall, it appears clear from her statements that although Kristalina Georgieva does not want an outright ban on cryptocurrencies or other digital assets just yet, she wants closer regulation so as to better protect consumers from any potential risks associated with them or their use within global markets and economies alike.