IWF recommends 5-point crypto regulatory scheme

IWF recommends 5-point crypto regulatory scheme

When global influencers rubbed the elbows in Davos, the IWF published recommendations for crypto to global regulatory authorities. Depending on who you ask, the cryptor regulation of the industry could harm or open huge new markets for normal investors.

In a note published during the week, the International Monetary Fund wrote:

"In stressful times we have experienced market failure of stable coins, crypto -oriented hedge funds and crypto bonds, which in turn raised serious concerns about market integrity and user protection. And with growing and deeper connections to the core financial system, in the near future there could also be concerns about systemic risks and financial stability."

The preferred approach of the IMF to counteract this concerns is increased global crypto regulation:

"Many of these concerns can be addressed by strengthening financial regulation and supervision as well as the development of global standards that can consistently implement by the national regulatory authorities."

The recommendations are:

1) License, register and authorize providers of crypto-assets. 2) Forbid crypto entities, to perform several functions in a company that create conflicts of interest. 3) Application of a strict, bank-like regulation to stable coin emitters. 4) Determine clear requirements for traditional financial institutions for exposure or commitment with crypto. 5) Create a consistent global approach for cryptor regulation and supervision.

represent a threat?

While it seems unlikely that the whole world could agree on cryptor regulations, the possibility of a global regulatory system seems to suffocate. Finally, Bitcoin was primarily invented to avoid the global financial system.

In the opinion of the Creator and the earliest user of Bitcoin, it was the global financial system that was the risk of infection with a spillover risk. The regulations have contributed nothing to stop a financial downturn that was much larger than the crypto winter, which shocked the global markets in 2008.

In fact, it is even possible that financial regulations have led to the 2008 financial crisis. The regulation of the money supply by the central bank was moderate in the years before. This promoted wild speculation in exotic instruments with borrowed money to low interest rates.

well or bad?

When the money circulation speed fluctuated and re-rated every dollar according to the constantly growing new range of USD, the same thing happened with Wall Street as with Alameda-FX. They held on to all of these assets that were not really worth what they said on paper.

A global regulatory system with inflexible, uniform rules compiled by committees could easily crush such an important project as Bitcoin before it even has a chance to get started.

or maybe just as easy to inspire and check the control of a ecosystem of peer-to-peer network governance, the ad hoc of developers, entrepreneurs and the markets they operate are cobbled together.

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