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Investing.com – The IMF has called for a coordinated, coherent and comprehensive global response to changing regulatory requirements. According to the fund, cryptocurrencies have become cross-border and cross-industry entities used for speculative investments, hedges against weak currencies and as a potential means of payment.
“Crypto assets have been around for over a decade, but it’s only now that efforts to regulate them have moved to the top of the political agenda. ‘over the past few years that crypto assets have evolved from niche products in search of a purpose to more mainstream products…’.
In addition to the legal and regulatory frameworks applicable to crypto-assets and cryptocurrency actors, governments must also consider the underlying technology and how it fits within other public policy objectives including their energy consumption.
Globally, there is regulatory fragmentation that does not ensure a level playing field or prevent a “race to the bottom” as cryptocurrency players may shift their base to more favorable jurisdictions, a said the IMF.
“The regulatory fabric is being woven, and a pattern should emerge. But the concern is that the longer it takes, the more national authorities will be locked into different regulatory frameworks. This is why the IMF is calling for a response world…”.
Enforcing existing rules or creating new ones for the digital asset industry is a challenge, as this whole space is rapidly evolving.
“Regulators are scrambling to acquire the talent and learn the skills to keep pace, given limited resources and many other priorities. Oversight of cryptocurrency markets is difficult because data is patchy and that regulators struggle to keep up with thousands of players who may not be subject to the usual disclosure or reporting requirements.”