The past months have been crucial for cryptocurrencies, especially concerning regulations and laws. Governments, organizations, and regulators have all rushed to find ways to regulate the various digital currencies as well as exchanges. In addition, finding solutions to tax cryptocurrency gains and crypto trading places is a battle officials have to face in the upcoming years as digital currencies become more and more popular. For now, nations and lawmakers have functioned individually and cooperation has been minimal.
The International Monetary Fund, an international organization composed of 189 countries, that aims to promote financial stability and sustain economic growth around the world, amongst other responsibilities, has recently openly come out to discuss cryptocurrencies and the risks that they posed. The organization, which is part of the United Nations, has declared that its main concerns are the negative aspects of cryptocurrencies and the way individuals with bad intentions could use them to fulfil their objectives. It is wary of illegal activities such as terrorism funding using coins and tokens, as well as money laundering and drug-related activities. These are also the concerns of many governments across the world, as we have seen in the previous weeks in South Korea for example, and even larger groups like the European Union. Lawmakers are experiencing issues and growing pains when it comes to crypto markets.
According to a Bloomberg report, the IMF also called for a global cooperation amongst countries around the world regarding these virtual currencies. As mentioned before, nations have dealt with them individually instead of coming together and operate os one. The IMF wants to change that, as it believes that actors can be stronger together. The IMF spokesman Gerry Rice stated that “Greater international discussion and cooperation among regulators would be helpful”. Fear is growing within the organization as bitcoin and other currencies are rising in value and becoming increasingly popular amongst individuals across the world, especially in countries like Japan, South Korea and the US. It is still hard for the IMF to pinpoint exactly how to make these countries coordinate and come together to work on common regulations, but sounding the alarm is a first step for the financial organization. It is also growing wary of the speculative aspect of these new virtual currencies, and the potential risks and losses that come with investing. There are numerous individuals borrowing money to invest in cryptocurrencies, and it can lead to bigger issues in the long run. The IMF is calling on worldwide cooperation to mitigate risks and avoid potential crises.
TLDR: As cryptocurrencies rise in value and more individuals start investing, larger financial organizations like the IMF are growing wary of the risks that come with them. The IMF now calls for global cooperation and is looking for effective ways to take action.