Cryptocurrencies need regulation in emerging markets, says IMF

New Delhi, December 16

International Monetary Fund (IMF) Chief Economist Gita Gopinath has made a strong case for regulating cryptocurrencies, saying it will always be a challenge to ban them as they operate from offshore exchanges. Gopinath also suggested a global policy and co-ordinated action for regulating cryptocurrencies.

“I think cryptocurrencies are a particular challenge for emerging markets. It seems to be more attractive to adopt cryptocurrencies and assets in emerging economies than in advanced economies,” she said while addressing an event organised by the National Council of Applied Economic Research (NCAER) on Wednesday.

India is contemplating bringing a Bill in Parliament to deal with the challenges posed by the unregulated cryptocurrencies. Currently, there are no particular regulations or any ban on use of cryptocurrencies in the country.

“Regulation is absolutely important for the sector (cryptocurrencies and assets)… Countries around the world are trying different things, there are obviously challenges to banning (cryptocurrencies and assets),” Gopinath, who is slated to be the first deputy managing director of the IMF early next year, said.

According to the IMF chief economist, no individual country could solve this (cryptocurrencies) problem on its own given the complex cross-border transactions.

“Because a lot of these crypto exchanges are offshore, they are not subject to regulation of a particular country… So, there is a need for a global policy on that front urgently,” she observed.

Replying to a question on India’s fiscal and monetary policy, Gopinath said India’s core inflation is slightly above 6%; so, in that environment, having to make policy, while recognising that the economy is not fully recovered is a major issue. — PTI

COUNTRIES FIGURING DIFFERENT WAYS

Regulation is absolutely important for the sector (cryptocurrencies and assets)… Countries around the world are trying different things, there are obviously challenges to banning them — Gita Gopinath, Chief Economist, International Monetary Fund