Govt regulations shouldn’t affect bitcoin, crypto benefits, IMF says, commends Nigeria

The International Monetary Fund (IMF) said regulation of cryptocurrency activities shouldn’t hinder the “plenty” “potential” that crypto assets offers the financial industry.

In the past months, IMF had been suggesting that the crypto market, which is now worth $2.4 trillion, needs to be restricted to avoid what the agency called “cryptoization”, which is the replacement of fiat currency with bitcoin and its other contemporaries.

According to IMF, the financial global body stated that countries are making “crypto assets such as Bitcoin national currency.” a move it described as very risky.

While suggesting regulation of crypto assets, the statement reads that, “Increased international regulation should not, however, undercut the enabling environment for useful crypto-asset products and applications.”

IMF is of the opinion that stablecoins or crypto assets have tremendous potential to make financial services more accessible and cheaper, just like the Central Bank Digital Currency (CBDC).

“Emerging market and low-income economies especially stand to benefit—so long as the risks are managed.” IMF wrote, but it charges government to step up by offering a counter to crypto assets.

The body said government should create new digital money “while preserving stability, efficiency, equality and environmental sustainability.

It used Bahamas and Nigeria as examples of countries that have launched government-backed digital currency to counter the rising adoption of bitcoin and other cryptocurrencies in their country.