IMF Board 'Generally Agreed' Crypto Shouldn't Be Legal Tender

 IMF Board 'Generally Agreed' Crypto Shouldn't Be Legal Tender

The leadership of the International Monetary Fund (IMF) stated that while outright bans on cryptocurrencies may not be the best solution, they should not be completely disregarded.

The Executive Board of the International Monetary Fund (IMF) stated on Thursday that legal tender status should not be granted to cryptocurrency as a general rule. 

The board, composed of 24 directors who were elected by the IMF's member nations, had received a staff paper earlier this month that highlighted the dangers posed by crypto to monetary policy, financial stability, tax collection, and consumer protection.

According to the statement, the directors unanimously believed that crypto assets should not be given the status of official currency or legal tender, in order to protect monetary sovereignty and stability. 

They urged nations to establish clear tax policies and conform to international norms.

According to the statement, the directors have concurred that implementing severe prohibitions is not the most ideal solution, but rather specific restrictions could be put in place to limit the risks associated with cryptocurrencies. However, some members of the board believe that completely banning them should not be ruled out.

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The statement further noted that the widespread use of cryptocurrencies in some countries, their cross-border nature and connections to the financial system necessitate a unified and comprehensive approach. 

The statement also stated that regulatory measures should not impede innovation, and governments could leverage the digital technology underlying cryptocurrencies.

Previously, the IMF has conveyed apprehension about the possibility of cryptocurrency being utilized to circumvent government-enforced capital controls. Additionally, the organization discouraged countries like El Salvador that aimed to establish bitcoin (BTC) as their official currency.