Banning Private Cryptos Should Not Be Taken Off The Table: IMF Chief

At a time when India is yet to decide the fate of private crypto assets in the country, International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva said that banning private cryptocurrencies should be an option.

“We have to differentiate between central bank digital currencies that are backed by the state and stable coins, and crypto assets that are privately issued,” Georgieva said. The IMF chief made the comment while speaking on the sidelines of a G20 meeting in Bengaluru, news agency Reuters reported.

Georgieva stressed on the need of a highly strong push for crypto regulation. “…if regulation fails, if you’re slow to do it, then we should not take off the table banning those assets, because they may create financial stability risk,” she said as quoted in the report.

Meanwhile, the IMF has proposed a nine-point action plan on how countries should treat crypto assets. Among all the points, the IMF has recommended that countries not give any crypto asset a legal tender status.

“Safeguard monetary sovereignty and stability by strengthening monetary policy frameworks and do not grant crypto assets official currency or legal tender status,” IMF’s first recommendation said.

The IMF chief’s comment comes at a time when India is gearing up its efforts to regulate crypto. India’s federal economic affairs secretary Ajay Seth earlier said that the G20 countries are trying to reach a policy consensus on crypto assets to form better global regulation. Moreover, he also said that the Indian government aims to reach a consensus during its G20 presidency itself.

India assumed the G20 Presidency on December 1 and will hold till the summit to be held in New Delhi in September 2023.

Recently, Finance Minister Nirmala Sitharaman called on the IMF to formulate a globally coordinated approach to regulate crypto assets. The minister has reiterated the need for a global approach to crypto regulation multiple times.

On the other hand, India’s Reserve Bank of India (RBI) remains a staunch opponent of private cryptocurrencies and RBI governor Shaktikanta Das spoke in favour of crypto bans at different points of time. Das also said that the next financial crisis would be triggered by private crypto.