IMF States Cryptocurrencies Shouldn’t Be Granted as Legal Tender

Vignesh Karunanidhi
Cryptocurrencies May Continue to Evolve Despite Current Downturn, Says IMF
Source: BQ Prime

Cryptocurrencies have come a long way in terms of adoption and acceptance. The exceptional growth of the industry has also garnered the attention of global regulators. Even though certain nations have adopted cryptocurrencies as legal tender, some nations are worried about them.

This outlook was even made worse with the downfall of FTX and other large players in 2022. The slew of events has caused regulators to take quick actions to create a legal framework.

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The International Monetary Fund recently said in a statement that cryptocurrencies shouldn’t be granted legal tender privilege.

Source: The World Economic Forum

IMF says targeted restrictions can limit cryptocurrency risks

“Efforts to put in place effective policies for crypto assets have become a key policy priority for authorities, amid the failure of various exchanges and other actors within the crypto ecosystem, as well as the collapse of certain crypto assets.”

The statement by the IMF mainly covers some of the elements in the framework that can aid in creating a coordinated policy. The IMF collectively believes that the growing adoption of cryptocurrencies requires a comprehensive, coordinated, and consistent response.

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The fund also spoke about macroeconomic risks and raised concerns about financial stability and consumer protection. Additionally, the IMF also mentioned that they could act as thought leaders in providing further analysis for rapidly evolving technologies like cryptocurrencies.