- The International Monetary Fund has no current plans to ban cryptocurrencies
- The IMF preferes strong regulation, its Managing Director Kristalina Georgieva said last week
- However, it could consider a ban if regulations don’t protect users
The International Monetary Fund (IMF) won’t push for a ban on cryptocurrencies, but will insist on strong regulation, according to IMF Managing Director Kristalina Georgieva. Georgieva expressed her feelings on the crypto sector during an off-stage comment at the G20 finance ministers meetings in Bengaluru, India, where she said that the IMF is “very much in favor of regulating the world of digital money,” adding that it was a “top priority”. However, if regulations don’t prove sufficient to protect investors, then a ban might be considered.
IMF Has Warned Over Crypto Before
The IMF hasn’t had the greatest relationship with the crypto sector in the past, which isn’t really surprising. Back in 2018 it warned the Marshall Islands against adopting cryptocurrencies as legal tender, saying it would cut itself off from foreign aid if it did, a message it repeated to El Slavador in 2022.
In a 2021 report it said that the rapidly growing crypto ecosystem presented both “opportunities and challenges”, citing “operational and financial integrity risks” around the sector. It’s no surprise, then, to learn that it wants to play a part in regulating the crypto space. During an interview with Bloomberg during the G20, Georgieva said that while fully-backed stablecoins (including Central Bank Digital Currencies, which are backed by fiat currencies) create a “reasonably good space for the economy,” non-backed crypto assets are speculative and high risk, and should not be considered money. Which is a good thing, because no one says that they are.
Ban Not Out of the Question
Georgieva did however caution that the possibility of banning cryptocurrencies would be explored if they begin to pose a greater risk to financial stability. However, she stressed that implementing good regulations and consumer protections would be a preferable alternative, but stated that the primary catalyst to a potential ban would be an inability to safeguard consumers.