When it’s time to ban crypto, according to the IMF

The world needs a new crypto stool, or the nuclear alternative – at least according to one of the world’s largest financial bodies. Kristalina Georgieva, managing director of the International Monetary Fund, shared that the international agency has suggested that countries should consider outright bans on crypto if they cannot agree to any effective crypto regulation.

“We are very much in favor of regulating the world of digital money,” she said Bloomberg in an interview outside a G-20 financial meeting. “We also need to recognize if regulations are slow to come and if crypto-assets become a high risk to consumers and potentially to financial stability. This option, which some countries insist, including India, that they could be banned, it should not be taken away the table.”

However, Georgieva prefaced her comments by saying that if there were enough consumer protections, a ban would not be necessary. At the same time, “we are not yet in this world” of real, effective crypto regulation.

The International Monetary Fund, mostly referred to as the IMF, is one organization of close to 190 countries whose members, in part, contribute to providing debt relief to countries and advice on stabilizing currencies. The IMF has regularly called crypto too risky and volatile for any country to adopt.

Georgieva’s comments came in light of G-20 talks over the weekend where Indian leaders expressed that all nations need a common framework for crypto regulation. US Treasury Secretary Janet Yellen told Reuters she agreed there is one need for new regulation, but also said the US has not proposed any outright bans. President Joe Biden’s administration published its own plans for crypto regulation last year, however it remains a question of which federal agencies have the authority to regulate certain types of crypto-tokens or exchanges.

At the end of last week, the IMF’s Executive Board came out with a paper which said in part that cryptocurrencies should not be given the status of legal tender. This decision was taken “to ensure monetary sovereignty and stability,” according to the fund.

Georgieva told Bloomberg that they are all in favor of digital currencies, especially dollar-pegged stablecoins, which are “backed by the state,” which could refer to a central bank’s digital currency. Only from December 2022 11 out of 114 nations that mentioned they were exploring a CBDC have actually launched one. Another 36% of these nations have a crypto token in development, according to think tank The Atlantic Council.

She made the distinction between publicly and privately issued coins because those with actual ties to a country’s monetary system are more stable than those without, which she called “speculative” and a “high-risk investment.”

For many years, the IMF has done so hammered the country of El Salvador whose leaders have attempted to make crypto legal tender. The IMF has routinely refused to provide El Salvador with funding for their crypto dreams. The country’s crypto hype train has had trouble staying on its tracks. El Salvador has lost tens of millions of dollars on his crypto gameaccording to reports.