The Financial Stability Board (FSB) and the International Monetary Fund (IMF) have tried to offer a roadmap to regulate crypto assets. They are assisting nations to integrate digital financial systems with virtual assets. However, both these institutions have admitted that blanket bans can increase crimes on circumvention due to the borderless nature of crypto assets. There are cryptocurrency processors like YaCrypto that can work cutting across borders without any difficulty. These processors are purposely designed such that political borders remain irrelevant.
Cryptocurrencies are basically pieces of computer code and it is not technically possible to ban them. Just like sharing music or text files, cryptocurrencies can be transferred easily from one wallet to another. Although cryptocurrencies are currencies in the legal sense, one can easily equate them with any cyber asset, commodity, or security. According to the CEO of Binance, it just does not matter whether one calls crypto a currency or not. The fact is there are millions of people who can hold and transfer cryptocurrencies from any corner of the world.
Cryptocurrencies now have millions of users worldwide. They are regularly trading and transferring these through processors such as YaCrypto. So, any user can always technically find someone willing to transfer the currency to their bank account.
There are high chances of black market trading if governments try to ban cryptocurrency. It may eventually be counterproductive for the government because it can lead to more financial risks. The black market may simply create more problems and inefficiencies for the government.
Moreover, both the IMF and FSB agree that the nations may need to be more vigilant. This can be done by supporting the Financial Action Task Force (FATF)’s anti-money laundering. Since cryptocurrency black markets can finance terrorist groups, it is advisable that counter-terrorist financing standards for virtual assets.
The International Monetary Fund (IMF) and Financial State Board (FSB) are advising that instead of blanket bans, additional measures should be adopted to face specific risks related to crypto. This is why they have made a roadmap to improve global financial coordination. They also support accurate information transfer along with international cooperation. The data gaps need to be addressed such that crypto-assets do not change rapidly.
Both these institutions support the pegging of crypto assets to the domestic fiat currency, such that there are fewer scams in valuations. This is because, without pegging, the transmission of money will become weaker. Crypto currencies will have major implications for both financial stability and macroeconomic situations after the recommendations are accepted.
Given the discussions on banning cryptocurrency, the IMF has joined hands with the FSB. Both these institutions are going to present their recommendations to the G20 this weekend. It will have a major impact on the crypto market. Furthermore, they also recommended that jurisdictions should empower monetary policy frameworks and protect against excessive volatility.
It seems that most countries have realized that there is no point in banning cryptocurrencies. This is because even after banning people may still find out ways to transfer cryptos online. The recommendations may have a long-lasting effect on the crypto market and may reduce some of the genuine concerns associated with crypto.