Regulators Must Catch Up With Crypto Assets, Says IMF
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Aditya Narain, director of the IMF's capital markets, and Marina Moretti, assistant director, observed in a recent study that crypto assets have significantly moved away from being "niche products." They are now utilized for speculative investments, currency hedges, and payment systems.
According to Narain and Moretti, creating regulatory frameworks for crypto assets is a difficult challenge. They list the market's rapid growth, the challenge of monitoring, and the lack of practical skills among regulators as some of the most significant challenges, stating,
"Regulators are struggling to acquire the talent and learn the skills to keep pace given stretched resources and many other options."
Inconsistent Approach To Crypto Regulation
Additionally, the authors have criticized the disparate authorities' varied approaches to cryptocurrency regulation and have proposed a coordinated, uniform, and comprehensive global crypto framework for such regulation.
They state that some regulators may prioritize consumer protection, while some might focus on other aspects such as safety, soundness, or financial integrity. Additionally, various crypto actors, including protocol designers, validators, and miners, are difficult for traditional financial regulation to cover.
"A global regulatory framework will bring order to the markets, help instill consumer confidence, lay out the limits of what is permissible, and provide a safe space for useful innovation to continue."