During recent G-20 summit, Kristalina Georgieva reinstate’s her stance about banning cryptocurrency if crypto becomes a high risk asset. In an interview with Bloomberg she further states that “Crypto is not real money and not backed by anything” .
IMF Managing Director, Kristalina Georgieva, wants to clear the definition of Digital Money. She wants to clearly differentiate between central bank digital currency backed by the state and publicly issued crypto assets and stablecoins. Crypto assets that are not backed are high risk, speculative and are not real money. Crypto assets cannot be real tender because hey don’t have definition of money and hold no value.
She also states that crypto becomes a risky asset for emerging markets. However some countries may still need it depending on the economy. She further states that regulating cryptocurrencies is the primary goal for IMF(International Monetary Fund) and FSB(Financial Stability Board).
If the regulation is slow to come and crypto assets become a higher risk for consumers and potentially for financial stability, the option of banning cryptocurrencies should not be taken off the table as per IMF MD, Kristalina. She also points to Indian’s ban on cryptocurrency because it was considered a risk asset based on countries; economic condition.
In an exclusive interview with Bloomberg Kristalina explains that that the IMF is pushing for increased regulation of private cryptocurrencies. The reason for this, according to Georgieva, is that these cryptocurrencies lack backing from authorities and are considered speculative, resulting in a significant level of associated risk. Georgieva made these comments while speaking to Bloomberg on the sidelines of the G-20 finance ministers meetings in Bengaluru, India.
During the G-20 summit India requested IMF and FSB to develop Synthesis Paper on Crypto Assets. You can read more about this topic here. The objective is to establish a cohesive and all-inclusive approach towards crypto assets,” as stated by the finance ministry of India, Nirmala Sitharaman. Last year, she aspires India to establish a technology-driven regulatory framework for crypto assets. Sitharaman also wanted global cooperation on regulating cryptocurrency.
You may be interested to read more about the below topics
- Crypto Industry is Under Siege by Regulators
- Reserve Bank of India(RBI) Governor Mr.Das says Crypto must be banned and compares it to gambling
- Hong Kong plans to make crypto purchase and trading legal for all of its citizens
