CBDC and worldwide crypto standards are recommended by the IMF for financial stability.

By Warren Hayes | October 3, 2021
IMF: Separate Cash and e-Money to Offset Negative Interest Rates

The International Monetary Fund (IMF) reportedly issued a series of actionable policies dedicated to the emerging markets and developing economies, to achieve stability in current crypto adoption worldwide. 

Specifically, The IMF reportedly has a firm belief that crypto-assets possess the ability to function as a medium to achieve cross-border payments with enhanced speed and reduced cost, referring to the significant surge in the value of the crypto markets, regardless of the bearish trends from May this year.

The report reportedly mentioned high returns, transaction costs and speed, and reduced Anti-Money Laundering (AML) standards to be the factors fueling the adoption rate of crypto. 

In an attempt to deal with the resultant financial stability concerns – consequences surfacing due to surges in the trading of crypto assets – the IMF has reportedly suggested the following:

“Policymakers should implement global standards for crypto assets and enhance their ability to monitor the crypto ecosystem by addressing data gaps. Emerging markets faced with cryptoization risks should strengthen macroeconomic policies and consider the benefits of issuing central bank digital currencies.”

The IMF report additionally revealed that the crypto market valuation has reportedly exceeded outside the confines of Bitcoin (BTC), together with a sharp rise in stablecoin offerings. 

The insights from the IMF, consolidated after three-year research, reportedly recommended that risk-adjusted returns of non-stablecoin crypto assets, nominally Bitcoin, stand comparable to different mainstream benchmarks such as S&P 500. 

Apart from CDBC issuance, the IMF also suggested  “proportionate regulation to the risk and in line with those of global stablecoins”. Besides CBDC implementation, de-dollarization policies will assist the authorities in dealing with macro-financial risks.

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