IMF Chief Urges Bold Crypto Regulation for Global Financial Stability

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, stressed the imperative need for comprehensive cryptocurrency regulation to safeguard global financial stability. Addressing a digital currency conference in Seoul on Thursday, Georgieva underscored the potential threats posed by the extensive adoption of cryptocurrencies, expressing concerns over their impact on macro-financial stability.

Georgieva emphasized that effective regulation was essential to avert disruptions in monetary policy transmission, capital flow management measures, and fiscal sustainability, especially in the context of volatile tax collection. “Our objective is to create a more efficient, interoperable, and accessible financial system through regulatory frameworks to mitigate crypto risks and leverage its technologies for infrastructure,” stated Georgieva during the joint conference with the South Korean government and central bank.

She further added, “Regulations aim not to regress us to a pre-crypto era but to foster and direct innovation. Good regulations can stimulate and steer innovation.”

In a panel discussion on the development of digital money, Georgieva highlighted that policymakers could either engage in shaping it effectively or risk being sidelined, as its evolution was inevitable regardless.

Moreover, a recent study by KuCoin revealed that 35% of Nigerians aged between 18 and 60 were actively investing or trading in bitcoin and other cryptocurrencies. In 2022, Nigeria’s Securities and Exchange Commission unveiled a new set of regulations aimed at governing digital assets, signaling a potential shift in the government’s approach to the widespread utilization of cryptocurrencies.