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A Uniform and Global Approach to Crypto Regulation
According to a study from the International Monetary Fund (IMF), cryptocurrencies are becoming more popular as speculative investments, hedges against weak currencies, and prospective payment vehicles. The IMF has demanded a coordinated, uniform, and thorough global approach to cryptocurrency regulation. In the September issue of its flagship publication Finance & Development, the International Monetary Fund (IMF) released research titled Regulating Crypto: The Right Rules Could Provide a Safe Space for Innovation. Aditya Narain, the deputy director of the IMF’s Monetary and Capital Markets Department, and Marina Moretti, the assistant director, wrote the paper.
Although crypto assets have been available for more than ten years, efforts to regulate them have only recently risen to the top of the legislative agenda, according to the research. Cryptocurrency assets have just recently entered the mainstream as speculative investments, hedges against depreciating currencies, and prospective payment tools. Previously, they were niche items without a clear use. The failure of cryptocurrency issuers, exchanges, and hedge funds, as well as a recent decline in cryptocurrency prices, have fueled calls for regulation, according to the authors.
Creating new Frameworks is a Challenge.
The study describes difficulties with crypto regulation. Applying current regulatory frameworks to crypto assets or creating new ones is difficult for a number of reasons, according to Narain and Moretti. To begin with, the cryptosphere is evolving quickly. Given their limited resources and competing priorities, regulators are finding it difficult to develop the talent and skills necessary to keep up with the pace. Regulators find it challenging to keep track of thousands of actors who might not be subject to customary disclosure or reporting obligations, which makes it tough to monitor the crypto markets, they said.
The IMF officials noted attempts to create crypto rules at the national and international levels and stated that the regulatory fabric is being knit, and a pattern is anticipated to emerge. The concern is that as time passes, more national bodies may become ensnared in varying regulatory systems.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
