IMF plans, with regulations, to prevent crime and supervise all the transactions. IMF experts revealed that the FATF guidance intends to regulate bitcoin.
Three officials from the International Monetary Fund (IMF) revealed the need for a global regulatory framework for cryptocurrencies. The goal, they explained, intends to consolidate the prevention of crimes with bitcoin (BTC) and other digital assets.
The three leading directors of the organization, Tobias Adrian, Dong He, and Aditya Narain, proposed to the IMF Financial Stability Board the development of a global regulatory framework. The goal would be to bring a more comprehensive and coordinated approach to keep track of all the trades executed with BTC and other cryptocurrencies.
According to officials, cryptocurrencies, characterized by their cross-border and cross-sector capacities, put limits on the effectiveness of national approaches to their regulation. Countries are adopting different strategies and, according to the executives, they may end up setting preventive measures for the comprehensive coverage of these assets.
The directors also talked about the Financial Action Task Force, which recently updated its guide to regulate bitcoin. However, they clarified that, while this and other regulatory proposals are quite useful, they are not sufficiently coordinated towards a global framework to handle risks against financial and market integrity, financial stability, and consumer protection.
The Proposals Seem to be Inconceivable from the Bitcoin Ecosystem
IMF officials highlighted all the aspects that the proposed regulatory framework must contain to make it global. For this, they rely on the crimes of corruption, money laundering, and terrorist financing that can get committed with cryptocurrencies. According to the international payments organization, Swiftthese digital currencies may play a simple role in these illegal actions.
Some proposals got applied in many countries and received the support of many companies such as Binance. In the case of Binance, the most popular exchange according to its volume of trade, this year called for better regulation for BTC.
The entity explained that those who provide services related to cryptocurrencies, such as digital wallets, exchanges, and others, must have a license or authorization to operate.
The requirements must get tailored to the first assets and stablecoins use cases. Thus, investment services and products must comply with the same obligations as brokers and securities dealers, in addition to being supervised by the relevant regulator.
Meanwhile, services and products for payments with cryptocurrencies should meet similar requirements to those of bank deposits and get supervised by the Central Bank or the payment supervision authority of each jurisdiction.
Regardless of the authority to approve services and products connected to cryptocurrencies, all supervisors, from central banks to securities and banking regulators, must coordinate to address the various risks that arise from different and changing uses, they point out.
The directors also propose that authorities should provide more clear requirements to already regulated financial institutions regarding their exposure and commitment to cryptocurrencies. Meanwhile, all regulated entities that bring custody services will notice that every requirement needs to get clarified so these entities can address the alleged risks that could arise from that function.
By: Jenson Nuñez
