The IMF urges joint effort because of concern that crypto might damage the global monetary system

The International Monetary Fund said on Thursday that rising crypto adaption necessitated a “coordinated response” from its members.

In a series of recommendations for member nations and a demand for a “coordinated response,” the International Monetary Fund adopted an apparently severe stance on the rapid use of cryptocurrencies.

“The widespread adoption of crypto assets might undermine the efficacy of monetary policy, bypass capital flow control measures, and raise fiscal concerns,” the institution stated in a statement, referring to a conversation its executive board held concerning crypto policies earlier this month.

“Directors generally remarked that, although the presumed potential advantages of crypto assets have yet to materialize, major concerns have developed,” the IMF said, saying that cryptocurrencies should not be accorded official currency or legal tender status. Although the majority of directors felt that strict prohibitions are not the optimal solution, a minority of directors said that complete bans should not be ruled out.

The IMF expressed worry about the effect of cryptocurrencies on financial stability, integrity, legal risks, consumer protection, and market integrity. Recommendations included the adoption of “unambiguous tax treatment of crypto assets.”

In addition, the group said that member nations might limit crypto-related risks by strengthening digital infrastructure and “alternative options” for cross-border payments and banking.

“Directors stressed that regulation should not hinder innovation, and that the public sector may utilize some of the underlying technologies of crypto assets to achieve their public policy goals,” the IMF added.

Also Read: Eclipse Will Create A Layer 2 Blockchain Compatible With Solana And Designed For The Polygon Network