Joint IMF and FSB Report Warns Against Total Crypto Bans
The International Monetary Fund (IMF) and the Financial Stability Board (FSB) have jointly released a report cautioning against the sweeping bans of digital currency exchanges and other crypto businesses. The two bodies explain that such bans could create negative economic and social consequences. The report explains that such bans can prevent the development of technological solutions for financial stability and cloud risks. The report also cautions that bans can create and incentive for investors to move their assets away from jurisdictions, which can create adverse implications, including potential capital outflows. Additionally, the report cautions against prohibiting crypto from the legal financial space as it could deny viable investment opportunities and hinder financial inclusion. The report advocates for a multipronged approach in dealing with the area, which should include an appropriate legal framework, robust supervision, protections for consumers and investors, and the exploration of new applications of distributed ledger technologies.