Joint efforts from the International Monetary Fund (IMF) and the Financial Stability Board (FSB) issued a warning against blanket cryptocurrency bans today.
The report was jointly published by the FSB and IMF, with its findings falling short of advocating regulatory measures that would impose a complete ban on cryptocurrencies.
The report noted that blanket prohibitions of cryptocurrencies could potentially impede the adoption of blockchain technology, which it says could be leveraged for financial inclusion efforts. Ultimately, the authors of the report determined that banning crypto activities could stifle innovation, while at the same time, enhancing the risk of the use of digital assets for illicit activities.
Rather than a total ban, the report suggested that “targeted measures” should be implemented, which should take into account risk considerations, such as money laundering, terrorist financing, and consumer protection.
In particular, the report suggested that targeted measures be pursued in the areas of customer due diligence, AML/CFT, licensing of providers of cryptocurrency services, dealing with foreign crypto assets, taxation, and supervision of the industry.
The report also suggested that regulators should work together, both domestically and internationally, towards the proper development of regulations and supervision frameworks that can accommodate crypto activities.
Ultimately, the report concluded that a balanced approach to crypto regulation, guided by “internationally accepted standards,” would be best suited for the risks that accompany the growth of digital assets.