Reports said that the International Monetary Fund (IMF) released a set of policies for the emerging markets and developing economies to ensure financial stability amid global crypto adoption.
It has been reported that the IMF believes in the potential of crypto assets as a tool for faster and cheaper cross-border payments, citing the dramatic increase in the value of the crypto markets despite the bearish trends from May 2021.
However, the report attributes high returns, transaction costs and speed, and reduced Anti-Money Laundering (AML) standards as the primary drivers for crypto adoption.
“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 report said that the IMF report shows that the crypto market valuation has expanded beyond Bitcoin (BTC), along with a sharp increase in stablecoin offerings. Three years of IMF data suggests that risk-adjusted returns of non-stablecoin crypto assets such as Bitcoin are comparable to other mainstream benchmarks like S&P 500.
Likewise, besides central bank digital currency (CDBC) issuance, the IMF further recommends “proportionate regulation to the risk and in line with those of global stablecoins.” In addition to CBDC implementation, de-dollarization policies will help governments tackle macro-financial risks.
In July 2021, it was reported on the IMF’s plan to “step up” the monitoring of digital currencies. Highlighting the benefits of digital assets, an older IMF report read that “payments will become easier, faster, cheaper and more accessible, and will cross borders swiftly. These improvements could foster efficiency and inclusion, with major benefits for all.”
Thus, the IMF has also previously planned to meet Salvadoran President Nayib Bukele for discussing the implications and possibilities of mainstream Bitcoin adoption.