The first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting was recently held in India. The key discussion points were regarding regulatory priorities and financial stability.
Representatives of the International Monetary Fund (IMF) were also a part of it. Aside from the main discussion, IMF Managing Director Kristalina Georgieva made an intriguing statement in favor of cryptocurrencies.
As per her statement, IMF is interested in regulating digital currencies instead of banning them and is seemingly a priority for the financial agency.
According to the Managing Director, the classification of digital money is surrounded by a lot of confusion. However, she stated:
“Our first objective is to differentiate between central bank digital currencies that are backed by the state and publically issued crypto assets and stablecoins.”
She also specified that stablecoins that are fully-backed are more beneficial for the economy, which cannot be said for non-backed stablecoins or other digital assets.
Digital currencies do lack the kind of solid foundation or support that fiat currencies have. Nonetheless, cryptocurrencies have made quite a mark in the world, which cannot be overlooked.
Considering everything, the IMF Managing Director recommended focusing on consumer protection, predictability, and good regulations to eradicate the need for a ban on digital assets.
However, if cryptocurrencies start posing a major threat to financial stability, banning them may become necessary.
It has also been established that IMF along with the Bank for International Settlements and the Financial Stability Board are collectively working on releasing crypto regulatory framework guidelines in the second half of 2023.
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