Cryptocurrencies have yet to prove themselves anywhere near as useful as proponents claim and can be dangerous to the world’s financial system, but their use should be controlled rather than banned, global financial regulators said in a new report.
At the request of India, which holds the presidency of the Group of 20 leading industrial and developing economies, previous recommendations from two major financial agencies and other standard-setting bodies have been combined into a list of suggested actions for national governments to undertake to accommodate digital currencies while protecting against the risks they pose.
Among the proposals from the International Monetary Fund and the Financial Stability Board are these five that Forbes finds interesting:
- Cypto-assets should not be granted official currency or legal tender status and central banks should avoid holding crypto-assets in their official reserve assets due to the risks and concerns about destabilizing impacts on the international monetary system
- Tax policies should ensure the unambiguous treatment of crypto-assets, and authorities should collaborate on cross-border information sharing and financial regulation for effective tax compliance.
- Authorities should apply their powers in proportion to the risks posed by crypto-asset activities and consistent with international standards. Jurisdictions were also advised to modernize or clarify laws applicable to the treatment of crypto assets, where necessary.
- There should be systems and processes for the collecting, storing, safeguarding and timely and accurate reporting of crypto-asset data, and authorities should have access to that data as appropriate.
- Global stablecoin issuers and relevant parties should provide market participants with comprehensive and transparent information to understand the functioning of each token. Authorities should require that stablecoins provide a robust legal claim to all users against the issuer and/or underlying collateral and timely redemption should be guaranteed.
