The chief economist at the International Monetary Fund (IMF) says that regulation is “absolutely important” for the crypto sector. She added that banning cryptocurrencies, like what India could be considering doing, would pose practical challenges given their decentralized nature.
IMF Chief Economist on Cryptocurrency and its Regulation
International Monetary Fund (IMF) chief economist Gita Gopinath reportedly discussed cryptocurrency at an event hosted by the National Council for Applied Economic Research (NCAER) on Wednesday.
Gopinath is also the IMF’s economic counselor and director of its research department. She is on leave of public service from Harvard University’s economics department where she is the John Zwaanstra professor of international studies and of economics. Gopinath is slated to be the first deputy managing director of the IMF early next year.
She said:
It seems that cryptocurrencies are more attractive to emerging markets than to developed economies.
Noting that “cryptocurrencies are a particular challenge for emerging markets,” she further opined, “emerging markets have exchange rate controls, capital flow controls, and cryptocurrencies can impact that.”
Gopinath added:
Regulation is absolutely important to this industry. If people are using it as an investment asset, the rules that exist for other categories of investment should apply here as well.
She added that banning cryptocurrencies would pose practical challenges, given their decentralized nature, emphasizing the need for a global policy on cryptocurrency.
Last week, the IMF presented some recommendations on how cryptocurrency should be regulated, noting that there is an urgent need for cross-border collaboration and cooperation in cryptocurrency regulation. The authors said, “Crypto assets are changing the international monetary and financial system in profound ways.”
The IMF also warned El Salvador in November against using bitcoin as a national currency. The country made bitcoin legal tender alongside the U.S. dollar in September and has purchased 1,370 bitcoins for its treasury.
