IMF wants more regulations on private cryptocurrencies, says Kristalina Georgieva

• IMF Managing Director is seeking more regulations on private cryptocurrencies.

• Kristalina Georgieva added that the IMF is not seeking an outright ban on digital assets. 

• Cryptocurrencies are discussed at the ongoing G20 finance ministers’ meetings in India.

IMF is seeking more crypto regulations

IMF Managing Director Kristalina Georgieva has revealed that the International Monetary Fund is seeking to regulate private cryptocurrencies. She made this statement while speaking on the sidelines of the G20 finance ministers’ meetings in Bengaluru, India.

In an interview with Bloomberg, Georgieva said the IMF doesn’t want an outright ban on cryptocurrencies and other digital assets. However, they want to differentiate and regulate crypto assets

She explained how the United Nations financial agency currently looks at digital assets and what it intends to achieve in terms of regulation. 

She stated that;

“We are very much in favour of regulating the world of digital money. And this is a top priority.”

She responded to questions about her recent statement on the potential complete ban on cryptocurrencies. The IMF director said that is unlikely to happen at the moment, and there is still much confusion around the classification of digital money. She added that;

“Our first objective is to differentiate between central bank digital currencies that are backed by the state and publically issued crypto assets and stablecoins.”

Georgieva pointed out that fully-backed stablecoins create a reasonably good space for the cryptocurrency economy. However, the non-backed crypto assets are speculative, high risk, and not money, the IMF director added. 

Crypto assets cannot be legal tender

In June 2021, El Salvador made history as the first country in the world to make Bitcoin a legal tender. 

However, Georgieva said cryptocurrencies could not be legal tender since they are not backed. She further pointed out that the option to ban crypto assets should not be completely dismissed if they begin to pose a greater risk to global financial stability. 

Georgieva said the best option would be to ensure better regulations, predictability and consumer protection in the cryptocurrency space. 

When asked what could lead to a total ban on cryptocurrencies, Georgieva said when industry players completely fail to protect consumers.  

Her comments come following Bitcoin’s impressive performance since the start of the year. At press time, the price of Bitcoin stands at $23,406, up by nearly 50% since the start of the year.