Over the past few years, crypto assets have moved from being “niche products” to a more mainstream presence, necessitating more comprehensive regulation of the space, according to the International Monetary Fund (IMF).
In a new report written by the IMF’s Director of Capital Markets, Aditya Narain, and Deputy Director Marina Moretti, officials noted that crypto assets have moved from being “niche products” to those used for speculative investments. , hedging against weak currencies and payment instruments.
The authors added that this, along with recent failures by crypto issuers, exchanges, and hedge funds, has “strengthened the will to regulate.”
— IMF (@IMFNews) September 5, 2022
However, developing regulatory frameworks for crypto assets is an uphill battle, according to Narain and Moretti, pointing to rapid market evolution, difficulty in monitoring, and a lack of actionable skills among regulators among the most serious hurdles. declaring:
“Regulators are struggling to acquire the talent and skills to keep pace given limited resources and many other priorities.”
The authors also decried the inconsistent approach to crypto regulation among different regulators, instead arguing for a coordinated, consistent, and comprehensive global crypto regulatory framework.
“Some regulators may prioritize consumer protection, others security and soundness or financial integrity. And there is a range of crypto players – miners, validators, protocol developers – who don’t are not easily covered by traditional financial regulation,” they explained.
“A global regulatory framework will bring order to markets, help build consumer confidence, set the limits of what is allowed, and provide a safe space for useful innovation to continue.”
Regulators around the world continued to rally around the regulatory table.
In Europe, the final legal text of the long-awaited regulation on crypto-asset markets (MiCA) is expected to be published in the next four to six weeks. In the United States, a crypto regulatory bill named the Responsible Financial Innovation Act is expected to answer some of the biggest questions facing the digital asset industry.
Related: Australia’s new government finally signals its stance on crypto regulation
Even staunch crypto skeptics have started to buy into the idea of regulation on any blanket ban, with US Congressman Brad Sherman becoming the latest to change his tune after admitting that the market “has too much money and power behind it” to ban it. now.